Stuck in the Middle (Again)
The Fed just gave us the playbook: no move, no pivot — just patience. But patience comes with a side of warning signs.
Markets ended green after a rollercoaster session that saw tech dip, bounce, and surge again thanks to a late-day report that Trump might ease chip export curbs. Disney soared. Marvell sank. Nvidia rallied.
And the Fed? It flagged rising risks for both inflation and unemployment — a rare twin red flag that has traders guessing which side breaks first.
Most aren’t betting big. But they’re not bailing either.
⚡ Closing Bell:
➝ Dow Jones: ▲ +0.7% › 41,114.0 › Back in the green
➝ S&P 500: ▲ +0.4% › 5,631.3 › Led by tech and Disney
➝ Nasdaq: ▲ +0.3% › 17,738.2 › Chip stocks pulled a reversal
➝ Russell 2000: ▲ +0.3% › 1,919.8 › Small caps followed
Consumer discretionary and tech led gains. Healthcare and real estate lagged as defensive plays took a breather.
Macro Moves:
➝ 10-Year Yield: ▼ −3 bps › 4.28%
➝ 2-Year Yield: ⇨ Flat › 3.79%
Treasuries held steady. The Fed stayed put, but its tone wasn’t exactly calming.
❗ Looking Ahead:
Tariff diplomacy is heading to Switzerland. With $100B in potential EU retaliatory duties looming and chip export rules on the table, global trade is once again center stage. Add Powell’s inflation-unemployment double warning, and it’s clear: this isn’t a “risk-off” moment — it’s a “watch your footing” market.
#TRUTH:
❗❗❗ "Every day is a new day. It is better to be lucky. But I would rather be exact. Then when luck comes you are ready." ~ Ernest Hemingway
No Move:
No cut, no hike — just a warning shot. The Fed held rates steady at 4.25%–4.50% on Wednesday, but the real story was in the tone: stagflation risk is rising, and nobody seems to know what comes next.
“Uncertainty has increased,” the FOMC said bluntly — highlighting both inflation and unemployment as growing threats. And stocks dipped after the statement dropped, with SPY sliding to session lows.
› Odds of a June cut? Still low (27%). July? Maybe (62%). But Powell didn’t offer much hope for doves.
› Labor markets may “appear” solid, but as Renaissance Macro’s Neil Dutta put it: “What makes the Fed assume this stabilizes on its own? It can’t and won’t.”
Markets were already jittery over trade, tariffs, and tech. Add stagflation to the mix, and the Fed’s caution hit differently.
The Takeaway:
Powell’s standing still, but the ground beneath him isn’t. The Fed’s juggling cooling labor demand, sticky inflation, and political heat — and hoping something breaks gently.
Open to the Public, Prone to Panic:
Moody’s just dropped a red flag: the booming retail interest in private credit could be the next headache for markets.
➝ Private credit has ballooned to over $2 trillion in assets since 2014 — with a growing slice now coming from regular investors.
➝ New ETF and evergreen fund formats are making it easier than ever for retail players to jump in, but with that accessibility comes liquidity risk.
➝ Moody’s warned that these flexible redemption structures could mimic a “bank run” scenario if investor confidence falters.
➝ Evergreen funds also tend to carry looser covenants, adding another layer of risk as traditional protections get watered down.
The Takeaway: Retail money is pouring into a space designed for institutions — and Moody’s says the mismatch in liquidity and transparency could end in a trust test. Expansion is good… until it’s not.
Beer Math:
The beer isn’t flowing quite like it used to — but the margins sure are. AB InBev (BUD) posted a 7.9% jump in Q1 operating profit, more than double what analysts expected, even as global sales volumes fell 2.2%.
➝ U.S. revenue slipped 5.1%, with the company blaming fewer selling days, Easter timing, and weather — but tariffs and sentiment shifts are the bigger elephants in the taproom.
➝ Globally, volume declines were softer than feared, and cost-cutting helped lift margins.
➝ Sales in China dropped 9.2%, but strong growth in South America, particularly Brazil, kept things buoyant.
➝ The company didn’t address the tariff threat directly — but competitors like Heineken and Carlsberg have already flagged it.
The Takeaway: Fewer pints, fatter margins. AB InBev is squeezing profit out of every can — but tariffs, aluminum costs, and shaky U.S. demand could leave this party with a hangover.
Tariff Went Gourmet:
Geoducks — the prized, phallic-shaped clams of the Pacific Northwest — are the latest casualties in the U.S.-China trade war.
➝ Nearly 90% of Washington’s geoduck exports went to China pre-tariffs. Post-tariffs? Orders have dried up as 125% retaliatory duties make U.S. shellfish wildly uncompetitive.
➝ The live nature of geoduck exports (harvested and shipped the same day) makes delays or storage nearly impossible — so canceled orders hit immediately.
Tribal divers and seafood exporters are sidelined, unsure when work will resume. One diver said it’s the first time in 24 years he doesn’t know if he has a job.
Meanwhile, Canadian competitors — facing just 25% tariffs — are cleaning up. Prices jumped from $12 to $17/lb as China pivots to more “stable” suppliers.
The Takeaway:
The market’s still there — just not for U.S. sellers. Until trade talks in Switzerland yield something concrete, Washington’s geoduck economy is stuck underwater.
Not Quite in the Green:
AMC posted a smaller-than-expected Q1 loss and blew past revenue estimates with $862.5M in sales, thanks to strong moviegoer demand and a record admissions take per guest.
➝ Net loss: $0.58 vs. $0.59 est. › Narrower than feared
➝ Revenue: $862.5M vs. $837M est. › Big beat on top line
➝ April domestic box office was double last year’s — and May’s off to a hot start
CEO Adam Aron says the blockbuster recovery is real, with hits like Minecraft and Sinners bringing in crowds, and a summer slate stacked with Mission: Impossible and Avatar: Fire and Ash.
The stock? Still down ~35% YTD. But this quarter may have given the crowd something to cheer.
Gains & Pains:
➝ Disney (▲ +10.8%) › Crushed Q2 earnings and raised full-year outlook — parks revenue and streaming subs surged.
➝ Rockwell Automation (▲ +11.9%) › Strong Q2 and raised full-year guidance — automation demand still hot.
➝ Nvidia (▲ +3.1%) › Rallied after Trump floated easing chip export curbs — semis led the bounce.
➝ Constellation Energy (▲) › Continued Tuesday’s breakout — strong Q1 and AI-driven utility demand still boosting sentiment.
➝ Novo Nordisk (▲) › Edged higher despite cutting guidance — management hinted GLP-1 competition could cool in H2.
😬 Pains:
➝ Marvell Tech (▼ −8.0%) › Narrowed Q1 revenue forecast and postponed investor day — guidance disappointment sank the stock.
➝ Alphabet (▼) › Slipped on testimony from Apple exec that flagged rising AI search competition.
➝ Uber (▼) › Missed earnings and revenue expectations — stock sank post-report.
➝ Lucid & Rivian (▼) › Both posted heavy quarterly losses — EV hype continues to cool.
➝ Ford (▼) › Fell after announcing price hikes on Mexico-made vehicles — likely tariff-related hedging.
❗The Takeaway:
Earnings were the main driver — and this time, upside surprises actually paid off. Disney and Rockwell stole the show, proving there's still room to run for companies that outperform. But under the surface, cracks remain: Marvell stumbled, Uber disappointed, and the EV trade looks tapped out for now. The Fed may be on pause, but the market isn’t — it’s sifting winners from laggards in real time.
Escapes:
Phang Nga 📍 Thailand 🇹🇭
Commodities Check : ✔️
➔ WTI Crude: ▼ +1.9% › $57.98/barrel
➔ Gold: ▼ -1.4% › $3,376.50/oz
➔ Silver: ▼ -2.7% › $32.48/oz
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Disclaimer
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