Today's Update 05-23-2025
Key Points and Metrics
Key Points and Metrics:
Economic Data Releases:
Canadian Retail Sales (March):
Retail Sales MoM:
Actual: +0.8%
Forecast: +0.7%
Previous: -0.4%
Core Retail Sales MoM:
Actual: -0.7%
Forecast: -0.1%
Previous: +0.5%
April Flash Estimate: Retail sales expected to rise by 0.5%.
German GDP (Q1 Final):
Quarter-over-Quarter (QoQ):
Actual: +0.4%
Forecast: +0.2%
Previous: +0.2%
Year-over-Year (YoY) Non-Seasonally Adjusted:
Actual: -0.2%
Forecast: -0.4%
Previous: -0.4%
French Consumer Confidence:
Actual: 88
Forecast: 93
Previous: 92 (Revised from 91)
Upcoming Earnings Estimates (May 28th):
Salesforce (CRM):
Earnings Release Time: 16:00 ET
Earnings Per Share (EPS) Estimate: $2.55
Revenue Estimate: $9.75 billion
NVIDIA (NVDA):
Earnings Release Time: 16:20 ET
EPS Estimate: $0.89
Revenue Estimate: $43.27 billion
Market Metrics:
Market Open Imbalance (MOO Imbalance):
S&P 500: -$513 million
Nasdaq 100: -$7 million
Dow 30: -$111 million
Mag 7 Index: +$2 million
Currency Strength Chart (Strongest to Weakest):
i.JPY (Japanese Yen) ii.NZD (New Zealand Dollar) iii.AUD (Australian Dollar) iv.EUR (Euro) v.CHF (Swiss Franc) vi.GBP (British Pound) vii.CAD (Canadian Dollar) viii.USD (US Dollar)
Treasury Rates:
Effective Federal Funds Rate: 4.33% on May 22
Secured Overnight Financing Rate (SOFR): 4.26% on May 22
Other Notable Events:
Energy Sector:
US Energy Secretary Wright: Announced that a nuclear energy announcement is forthcoming.
International Relations:
China and Germany:
President Xi Jinping held phone talks with Germany's Chancellor, discussing economic ties and the situation in Ukraine.
Emphasized the importance of cooperation in areas like artificial intelligence (AI) and quantum technology.
Russia and Ukraine:
Both countries exchanged 270 prisoners of war each.
Iran Nuclear Talks:
Iran and the US resumed nuclear talks in Rome, with Iran insisting on maintaining uranium enrichment.
European Developments:
ECB Rate Cut Expectations:
Traders are adding to bets on ECB rate cuts, now favoring three more cuts in 2025.
Bulgaria:
On track to win EU approval to join the Euro next year.
Market-Moving News:
Trump's Tariff Announcements:
Tariffs on the European Union:
Announcement: President Trump is recommending a 50% tariff on the European Union starting on June 1, 2025, citing difficulties in trade negotiations.
Impact: The S&P 500 and the Euro weakened following this announcement.
Tariffs on Apple:
Announcement: Trump threatens to impose at least a 25% tariff on Apple if iPhones are not made in the United States.
Impact: The S&P 500 index showed signs of weakening as a result.
Federal Reserve Insights:
Fed's Goolsbee:
Indicated that rate cuts are still possible over a 10-16 month horizon.
Expressed concerns that tariffs could have a stagflationary impact, which is challenging for monetary policy.
Noted that businesses are seeking consistency in policy before making significant decisions.
US Treasury Remarks:
Secretary Bessent:
Stated that most countries are negotiating in good faith, except the European Union.
Highlighted progress in trade talks with India.
Emphasized hopes for Apple to help enhance the US semiconductor supply chain.
Mentioned that the timing of the tax bill requires cautious consideration.
European Central Bank (ECB) Commentary:
ECB's Lane:
Expressed confidence that services inflation will come down.
Market Expectations:
Increased bets on ECB rate cuts, pricing in a deposit rate around 1.6% in December, down from 1.72% before Trump's remarks.
💰 Key Metrics to Watch:
30-year Treasury yield: 5.03% (down 1bp)
Effective Fed Funds Rate: 4.33%
ECB Rate Cut Bets: Markets pricing deposit rate at 1.6% by December
📈 Upcoming Catalysts:
May 28th Earnings: CRM (EPS: $2.55, Rev: $9.75B), NVDA (EPS: $0.89, Rev: $43.27B)
Treasury Secretary Bessent: Speaking at 11:30 ET
Nuclear Energy Announcement: Expected today per Energy Secretary Wright
🌍 Global Developments:
China-Germany Relations: Xi and Merz held phone talks on economic ties
Iran-US Nuclear Talks: Resumed in Rome
Russia-Ukraine: 270 POW exchange completed
Final Thoughts
The market is clearly in a risk-off mood, and frankly, I can't blame investors for being cautious. Trump's aggressive tariff stance - particularly that eye-watering 50% on the EU - is creating the kind of uncertainty that makes even seasoned traders nervous.
What's particularly concerning is the Fed's reaction. When Goolsbee calls a 50% tariff "scary for supply chain," that's central banker speak for "this could be a real problem." The fact that businesses are telling the Fed they want policy consistency before making big decisions tells you everything about the current investment climate.
The Canadian retail data split is interesting - headline retail sales beat, but core missed badly. This suggests consumers are still spending, but maybe not on the right things from an economic growth perspective.
Keep your eyes on those Treasury yields. The 30-year at 5.03% is still elevated, and if Trump's policies continue to spook bond markets, we could see further pressure on risk assets. The upcoming NVIDIA and Salesforce earnings will be crucial - if tech can't deliver in this environment, we might be looking at a broader market correction.
My advice? Stay nimble, keep some powder dry, and don't fight the Fed or the tariff tape. This market is telling us to be patient and selective.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry