Hey there, Nil!
Markets are serving up a sour dish today as Chinese officials firmly denied reports of trade talks with the US, calling such claims "groundless" and "fake news." As investors digest this unappetizing news, let's dive into today's market meal and see what's cooking! Plus, try your luck and win a $50 Amazon Gift Card! 🎁
- Dan
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- UK lifts sanctions against Syria's defence ministry and intelligence agencies.
- Russian attack on Kyiv kills at least eight, Ukrainian officials report.
- Israeli fire kills at least 26 people in Gaza, hits a police station.
- Russia accuses Zelenskiy of wrecking peace diplomacy.
- China and Kenya upgrade ties amid 'turbulent international situation.'
- South Korea expresses concern over the Chinese structure in the disputed sea area.
- Trump and Zelenskiy clash again as US warns it could abandon Ukraine talks.
- India vows to identify and punish terrorists and their backers after Kashmir attack.
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| Chef's Pick: TransMedics Group (TMDX) |
TELUS has outpaced Bell and Rogers since Sept 2023, thanks to growth in Health and Agriculture, now 11% of revenue. Despite slow TTech growth (1.8%), its diversified income and leaner 178% debt-to-equity ratio offer stability. (Price at call: $15.18, Current price: $15.09, Analyst expectation: $18.50) |
TransMedics Group has served up a challenging dish for investors recently, shares are down over 50% from their 2024 peak after missing Q3 revenue and EPS estimates, but long-term growth remains promising. Its FDA-approved Organ Care System supports lung, heart, and liver transplants, with 83% year-over-year revenue growth and first-time profitability in 2024. While limited by a $2.28B U.S. market and minimal global reach, the company holds a 20% market share and trades at more reasonable valuations. Risks include small market size, rising dilution, negative net cash, and compressed margins, but growth momentum and market leadership keep the outlook compelling. (Current price: $92.25, Analyst expectation long term: $120) |
European Equity Rotation Strategy: JPMorgan data shows significant growth in purchases of European equity ETFs relative to assets under management, such as Vanguard FTSE Europe ETF (VGK). This regional rotation complements ongoing domestic ETF purchases, suggesting investors are seeking geographic diversification while maintaining US exposure. Gold Safe-Haven Buffet: As the VIX climbs back above 29 and uncertainty persists, gold continues its bullish run, rising 1.4% to $3,340/oz. Julius Baer analysts note central bank buying, trade tensions, and rising recession risks as supportive factors, with "interference with the central bank" being "one of the bullish wild cards for gold." Hedge Fund vs. Retail Investor Divergence Play: JPMorgan's analysis reveals hedge funds have been reducing US equity exposure while retail investors continue buying domestic stock ETFs at approximately $50 billion per month. This divergence creates opportunities for contrarian positioning as institutional de-risking meets retail bargain-hunting. Semiconductor Sector Selective Sampling: Despite tariff concerns, companies like Texas Instruments (+9.3%) and Lam Research (+2.9%) are outperforming based on AI chip demand strength. TI noted "no near-term effect on revenue for the June quarter" from tariffs, while Lam's CEO expressed confidence in "outperforming semiconductor industry growth in the years to come." Defensive Positioning Platter: With both sides taking hardline stances (China: "We will fight, if fight we must. Our doors are open, if the US wants to talk"), prepare for prolonged tensions. Companies with high domestic US exposure and limited Chinese supply chain dependency will likely fare better than those caught in the crossfire of tariff escalation. |
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Trump Tariffs: Dealmaking or Deadlock? |
Is the tariff war cooling—or just getting started? After President Trump floated a "substantial" drop from the staggering 145% rate, hopes for a détente soared. But China quickly snapped back, demanding a full removal of U.S. tariffs and denying any ongoing talks. Commerce officials dismissed recent reports as "groundless," and China's central bank warned of rising "friction" and fading trust. Treasury Secretary Scott Bessent also struck a tough tone, calling current tariff levels "unsustainable" but slamming the idea of unilateral cuts. "This is the equivalent of an embargo," he said. Meanwhile, retaliatory moves are stacking up fast: China's duties on U.S. goods jumped to 125%, just as Tesla flagged rare earth supply issues tied to Beijing's new export curbs. Is a breakthrough coming—or just more strategic theater? Markets aren't sure. |
USD: Unemployment Claims – 222K (Forecast: 215K) USD: Core Durable Goods Orders m/m – 0.3% (Forecast: 0.7%) USD: Durable Goods Orders m/m – 2.1% (Forecast: 0.9%) USD: Existing Home Sales – 4.14M (Forecast: 4.26M) USD: Natural Gas Storage – 69B (Forecast: 16B) USD: FOMC Member Kashkari Speaks
Today's Key Reports - American Airlines: Airline sector under pressure after Southwest's weak demand comments
- Bristol-Myers Squibb: Pharmaceutical giant reporting after schizophrenia drug setback
- Comcast: Media conglomerate results amid streaming competition and cord-cutting trends
- Freeport-McMoRan: Mining company reporting as commodity prices fluctuate
- Merck: Pharmaceutical results amid healthcare sector volatility
- Procter & Gamble: Consumer staples giant navigating inflationary pressures
After the Bell: - Alphabet: Google parent reporting first earnings since antitrust ruling
- Gilead Sciences: Biotech company results amid healthcare sector pressure
- Intel: Chipmaker reporting as restructuring rumors swirl about 20% staff cuts
- T-Mobile: Telecom giant results amid competitive wireless market
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Databricks to Boost India Investment: Data analytics firm plans to hire 50% more employees and invest over $250 million in India, tapping the country's AI talent pool. The company will increase headcount to more than 750 employees by the fiscal year-end. Consumer Goods Makers Easing Price Hikes: Household goods and packaged food companies are reducing US price increases to avoid losing customers to cheaper private-label brands. Tariff concerns are raising worries about pushing the economy into recession with more expensive commodities and utilities. Roche Seeks US Tariff Relief: Swiss drugmaker petitioning the US government for import tariff exemptions, arguing its US imports are offset by exports of US-made drugs and diagnostics. The CEO stated, "As long as we produce the same amount in the US as we import... we would not be impacted by tariffs." Trump's Policy U-Turns Create Volatility: President shifted stance on both Fed Chair Powell and China tariffs this week, saying he had "no intention" to fire Powell despite criticism and suggesting a China deal would "significantly reduce" sweeping tariffs. Market whipsawed on conflicting signals. Investors Can't Outrun Tariff Impact: Citigroup's framework for trading potential tariffs suggested favoring companies like Target and Lowe's with high US sales while avoiding firms like Becton Dickinson and Starbucks with high China exposure. However, broad market moves show difficulty in escaping sector-wide impacts. Chinese Firms Announce Buybacks: Repurchase plans in China reached highest level since February 2024 stock rout, with 139 companies pledging 44.1 billion yuan ($6 billion) in buybacks this month. Efforts aim to offset market impact from US tariffs alongside state fund ETF purchases. LG Considering Price Hikes and Production Shifts: South Korean electronics company reviewing options to raise prices on some products and potentially move appliance production to the United States in response to tariffs. Senior VP confirmed "optimizing production locations and considering price hikes." Gold Remains Bullish on Multiple Factors: Julius Baer analyst notes gold will stay bullish amid trade tensions, recession risks, and central bank buying. Fed independence concerns could push prices well beyond this week's $200/oz swing. VIX Rises on Fading Trade Deal Hopes: Wall Street's "fear gauge" climbed 2.5% to above 29 as both US and Chinese officials denied proximity to trade negotiations. Readings above 20 typically indicate relatively high uncertainty. China Remains Open to Dialogue "Based on Mutual Respect": Commerce ministry spokesman noted China's willingness to talk but emphasized US should "take seriously the rational voices from the international community" and eliminate unilateral tariffs. Treasury Secretary Bessent Denies Contact: Bessent told reporters that representatives of the world's two largest economies were not engaged in tariff negotiations, stating, "Both sides are waiting to speak to the other." Foreign Companies Urged to "Jointly Defeat Unilateralism": China's vice commerce minister told foreign businesses that both they and Beijing are victims of US tariffs, expressing hope they would help combat protectionism. |
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Tesla (TSLA ⬇️ 1.7%): EV maker cooling off after Wednesday's 5.4% gain despite weak Q1 results. The company reported falling sales, operating income, and profit margins but reaffirmed plans to release new models in 2025 while working through "last-minute issues." CEO Musk's announcement of reduced DOGE involvement had previously boosted sentiment. IBM (IBM ⬇️ 7.7%): Tech veteran tumbling despite beating Q1 expectations on earnings and revenue. Legacy mainframe computer business continues to decline, and Q2 revenue guidance of $6.6B (midpoint) signals a 3% drop from the prior year despite exceeding analyst forecasts. ServiceNow (NOW ⬆️ 9.1%): Enterprise software provider jumping after topping Q1 expectations and guiding for higher Q2 subscription revenue than anticipated. Full-year subscription revenue forecast of $12.6-12.7B matched or exceeded Wall Street's $12.6B estimate. Texas Instruments (TXN ⬆️ 9.3%): Chipmaker surging on earnings beat and strong outlook. Q2 revenue guidance of $4.17-4.53B topped analysts' $4.1B projection. Management cited "high uncertainty" from tariffs and geopolitics but expects no near-term revenue impact for the June quarter. Lam Research (LRCX ⬆️ 2.9%): Semiconductor equipment manufacturer gaining after beating expectations on both earnings and revenue. CEO Tim Archer noted "strong performance driven by demand for advanced chips used to power artificial intelligence" and projected continued outperformance despite tariff uncertainty. Chipotle (CMG ⬇️ 3.8%): Fast-casual restaurant chain declining after reporting slower revenue and earnings growth in Q1. The CEO cited headwinds including weather and a consumer spending slowdown amid inflation and recession fears. Newmont (NEM ⬆️ 2.8%): Gold mining giant rising after crushing Q1 expectations with adjusted EPS of $1.25 vs $0.92 forecast. Revenue jumped to $5.01B from $4.02B a year earlier, also topping projections. Stock has gained nearly 43% this year alongside surging gold prices. Southwest Airlines (LUV ⬇️ 4%): Carrier descending after reporting $149M Q1 net loss. Adjusted loss of $0.13 per share beat the expected $0.18 loss, but the company noted weakening demand throughout the quarter, particularly in domestic leisure travel. Management withdrew 2025-2026 EBITDA estimates. |
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ETF Gainers: - GraniteShares 2x Long VRT Daily ETF (⬆️ 17.26%)
- Defiance Daily Target 2X Long SMCI ETF (⬆️ 14.87%)
- GraniteShares 2x Long SMCI Daily ETF (⬆️ 14.83%)
- GraniteShares 2x Long PLTR Daily ETF (⬆️ 14.36%)
- Direxion Daily PLTR Bull 2X Shares (⬆️ 14.36%)
ETF Losers: - Defiance Daily Target 2X Short SMCI ETF (⬇️ 15.69%)
- T-Rex 2X Inverse Tesla Daily Target ETF (⬇️ 11.56%)
- Direxion Daily Semiconductor Bear 3X Shares (⬇️ 11.46%)
- Tradr 2X Short TSLA Daily ETF (⬇️ 10.83%)
- GraniteShares 2x Short TSLA Daily ETF (⬇️ 10.80%)
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For more information and to verify the accuracy of the claims made in this email, please consult the following reliable sources: - UK lifts sanctions against Syria's defence ministry, intelligence agencies (Reuters)
- Air defence units in action around Kyiv, officials say (Reuters)
- Israeli fire kills at least 26 people in Gaza, hits police station (Reuters)
- Russia accuses Zelenskiy of wrecking peace diplomacy (Reuters)
- China, Kenya upgrade ties amid turbulent international situation (Reuters)
- South Korea expressed concern over Chinese structure in disputed area at sea (Reuters)
- Ukraine, Western countries meet on Russia war; diplomats say breakthrough unlikely (Reuters)
- India will identify, track, punish every terrorist and their backers, PM Modi says (Reuters)
- Biggest stock movers Thursday: IBM, TXN and more (Seeking Alpha)
- Trump plans some tariff relief for automakers – report (Seeking Alpha)
- Databricks to boost hiring, invest $250M (Yahoo Finance)
- Analysis: Nestle and rivals ease U.S. pricing push (Yahoo Finance)
- Roche seeks U.S. tariff relief (Yahoo Finance)
- Trump U-turns on Powell and China (Yahoo Finance)
- Trade, tariffs, and what's moving stocks today (Yahoo Finance)
- Chinese firms rush to announce buybacks (Yahoo Finance)
- LG Electronics may be raising product prices (Yahoo Finance)
- Stock Market Movers (Barron's)
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