May 16, 2025

Markets:

Stock futures rose Friday after the S&P 500 posted a four-day rally on the back of U.S. and China’s temporary tariff cuts and encouraging inflation reports.

Stocks have made a strong comeback since U.S. and Chinese officials earlier this week agreed on a 90-day truce in their tariff measures, which eased investors’ fears of escalating global trade tensions and rising risk to the economy.

Stocks got a boost Thursday from a soft inflation report, showing that wholesale prices declined 0.5% in April from the prior month. The result follows the release of April’s consumer price index earlier this week, which grew at a 12-month rate of 2.3%, its lowest since February 2021.

Even as the temporary agreement between the U.S. and China has lifted sentiment this week, some major U.S. companies are issuing warnings about rising costs and a murky macroeconomic outlook. Walmart said on Thursday that it will likely have to raise prices on some items in late May due to tariffs.

Friday could see an uptick in volatility on Wall Street due to a large amount of options contracts that are set to expire. Goldman Sachs estimated that more than $2.8 trillion of notional options exposure will expire on Friday, the biggest such number on record for a May trading day.

Portfolio:

Great week. Great month thus far. But today expect volatility! We began seeing it a bit yesterday into the close and today is a monster expiration day for the options market. Lots of puts burned to the ground and be interesting to see how today trades. Monster setups can emerge from days like today but you need to expect swings today. Monday, begins the next phase for this market we believe. Be ready.

We enter the final day of the week loaded with CONL, GME, and QUBT.  Few names running nicely but one that can get wild is AAPL above 214! Keep an eye on that one. TSLA above 343 is a monster brewing again. AVGO, NVDA, and entire chip sector brewing.  Bitcoin needs to cross and hold 104 and next level emerges which then takes stocks like MSTR and IBIT to new highs.  Just be ready so many beautiful setups are close.