It was a down session yesterday, but there wasn’t much significant damage outside of Health Care (XLV). Meanwhile, Utilities (XLU) are in the sweet spot, with a foot in the Artificial Intelligence (AI) revolution and reliable dividend payers.

There was a lot of red, but no significant damage across extended factors. Interestingly, small-cap momentum held up best, reflecting a more aggressive search for something to buy.

It’s Back!

With the most critical economic and earnings data behind us, trade developments and overall sentiment will drive the rest of the month.

Yesterday’s session began with a trade deal between the UK and India that was stalled for three years. 

Being Opportunistic

Don’t look now, but the Fear & Greed Index has eased into the ‘greed zone.’ I’m not sure what the record is, but it's been a swift move from ‘extreme fear,’ although the gauge was nestled there for a long time.

After the close, news broke that Bessent and Greer will meet their Chinese counterparts.

Today’s Session

Would you be surprised if I said the financial media is busy throwing cold water on the Bessent meeting with his Chinese counterparts?  It's fine, I prefer low expectations. 

But the efforts to dismiss this entire agenda is out of hand, or out of a need to protect the status quo. It is frustrating.

I benefit a lot from the current system.

Pumping corporate profits and the stock market, while selling America, is a big-time money maker, if you are on the right side of the equation. The stakes are much higher than anyone admits.

We are giving away our hard work, and eschewing savings to live in an artificial world that isn’t digital, but superficial and materialistic.

I love nice things, but I love being able to pay for them in cash even more.

And, I really love having money in the bank to sustain myself and my family, through inevitable hard times that are part of the cyclical nature of life and economies.

Many are pushing back on the effort for fair and smart trade, out of pure disdain for the President. It is like rooting against our soldiers during war because you do not like the occupant in the White House.

Other nations are circling the wagon to preserve the status quo – they like those American dollars no matter how much Wall Street elites shirk of the end of American Exceptionalism.

On that note, today's FOMC gathering will conclude without action on rates, but hopefully with an explosive question-and-answer period.

Every nation is cutting rates, and China has gone much further, unveiling a massive stimulus plan that includes a 50 basis points cut to Reserve Requirement Ratio and 10 basis points cut in Seven Day Reverse Repo Rate.

Let’s see if somehow the Fed will acknowledge it has a role in preserving the greatness of America, not just keeping the wealthy richer. 

Comments

We will start seeing trade deal this month. But trade deals won't be like an on/off switch. they are complex so I'm looking at steps within a framework. Mike T. on 5/7/2025 7:40:54 AM

Canada should be the first (easiest) to complete. UK or India next, maybe this month. Today regardless of Powell's remarks, I look for the market to drop during his comments to the press. Only basing this off the last several events of this type. Fred Clauhs on 5/7/2025 7:59:26 AM

June 3 Scott Spages on 5/7/2025 10:11:01 AM

Thursday with India. India is the magic key whose mentality lies somewhere east of Turkey and west of China. Clint on 5/7/2025 10:34:33 AM

I never realized how much greed has creeped into corporate America. The naysayers want what is good for them and screw everyone else. Jack Stevens on 5/7/2025 10:45:26 AM

India, May 9 Mel de la motte on 5/7/2025 1:52:58 PM

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