May 12, 2025

Markets:

U.S. stock futures surged early Monday after the U.S. and China agreed to temporarily reduce tariffs following productive negotiations over the weekend in Switzerland.

U.S. Treasury Secretary Scott Bessent described the talks as “very productive,” noting that both nations agreed to cut reciprocal tariffs by 115% for a 90-day period. This adjustment brings U.S. tariffs on Chinese imports down to 30% and Chinese tariffs on U.S. goods to 10%. Bessent told CNBC’s Squawk Box that he anticipates meeting again with Chinese officials in the coming weeks to work toward a more comprehensive trade agreement.

Tensions had escalated last month when President Donald Trump imposed 145% tariffs on Chinese imports, prompting a swift response from Beijing with 125% duties on U.S. goods.

If the futures rally holds through the close, the S&P 500 could inch back into positive territory for the year.

This week, investors will closely watch economic data for clues on the trade dispute’s impact. April’s consumer price index (CPI) is due Tuesday, followed by retail sales and the producer price index (PPI) on Thursday.

Portfolio:

While recent headlines continued to emphasize a bearish market tone, we’ve seen signs of quiet accumulation across multiple sectors — with aggressive positioning suggesting potential short-term gains of 20% to 40%. This morning’s news of progress toward a fair and mutual U.S.-China tariff agreement is exactly the catalyst we’ve been anticipating.

We believe the coming months could offer one of the most lucrative trading environments in years. If the administration follows through on rumored capital gains tax cuts in the next few weeks, it could pave the way for new market highs by summer.  We won't even get into the chase for performance afterwards to end 2025.  That chase opens the door for next level opportunities.

Additionally, we expect a renewed surge of interest in AI and tech — sectors still in the early innings of their long-term growth stories. This is a rare moment that demands readiness. The opportunity to go on offense is fast approaching.

As we enter today’s session, we’re positioned in RUN, TSLL, and SOUN. We’re evaluating a few target raises into the open to fully leverage the momentum.

What a way to kick off the week. Be ready.  This is only the beginning of what we believe to be a massive 2025!