May 5, 2025

Markets:

Stock futures declined to start the week as investors, hoping for progress on trade negotiations, were instead met with fresh tariff news. On Sunday, President Donald Trump announced a surprise 100% tariff on films produced outside the United States, calling foreign nations’ efforts to lure film production a “national security threat.” It remains unclear whether the tariffs will apply to movies shown in theaters, on streaming platforms, or both.

Trump also signaled no immediate plans to engage with Chinese President Xi Jinping, dampening hopes for progress in U.S.-China trade talks. “We’re negotiating with many countries,” he said, “but in the end, I’ll set my own deals — because I set the deal, they don’t.”

Attention is also turning to the Federal Reserve’s two-day policy meeting beginning Tuesday, with a rate decision expected Wednesday. Fed funds futures indicate just a 3.2% chance of a rate cut, according to CME Group’s FedWatch tool. However, investors will closely monitor commentary from the Fed and Chair Jerome Powell for insights into the economic outlook amid ongoing trade uncertainty.

Portfolio:

Heading into the week, market sentiment remains mixed, with many uncertain whether we’re seeing a bear flag bounce or the early stages of a new bull cycle. Bulls showed resilience over the weekend, reclaiming the “Tariff Tantrum Bear Gap” — now being dubbed the “Liberation Day Gap,” a level with strong technical and psychological significance. More notably, the 61.8% Fibonacci retracement has been reclaimed — a level that, in our experience, often precedes a full move back to the 100% mark. Few grasp the potential momentum that can follow such a move.

Today, we’re staying patient and observing how the market narrative unfolds to start the week. Several key earnings are on deck — including PLTR, HIMS, AMD, SMCI, UPST, APP, ARM, COIN, TTD, and AFRM — all influential not just within their sectors, but among retail traders as well.

We’ve had a strong start to May and are currently holding positions in CONL, SOXL, TSLL, SOUN, AAPU, and S. Expect some choppiness over the next couple of days — which could serve as a healthy pause before the next major move.