Yesterday, April 23: Less tariffs? Fake news.
Tariff hope retracted by Bessent, a possibly larger Russia, and the year of the anti-trust tech trial.
April 23 QFR:
After hours, Sec. Bessent walks back reports noting possible concessions in Chinese tariffs, noting no negotiations so far. China says their door remains open.
Trump blames Zelensky for halting peace progress despite the terms involving the signing over of nearly 20% of the county’s territory.
EU launches anti-monopoly lawsuits against Apple and META, with Google and X possible next targets.
Notes for April 24:
Durable goods and Initial Jobless claims to be dropped pre-market at 0530PST
Existing home sales at 0700PST.
And Donald Trump expected to sign more executive orders at 1330PST.
Earnings Calls to Watch April 24:
LUV 0.00%↑ - Southwest Airlines - Consumer Discretionary/Air Freight - Before Open
PEP 0.00%↑ - Pepsi - Consumer Staples/Beverages - Before Open
GOOG 0.00%↑ - Google - Tech/Computer Software - After Close
INTC 0.00%↑ - Intel - Tech/Semiconductors - After Close
US Market:
Trump further calmed things between him and the Fed by clarifying further he would not remove Fed Reserve Chair J Powell. Everyone appreciated this step away from political interference in monetary policy.
The Fed’s Beige Book on Wednesday noted a key takeaway, most businesses expect to pass through additional costs to customers. Verizon’s (VZ 0.00%↑) CEO stated, “we will not cover any enormous increase on tariffs on handsets. That’s ultimately going to hit the consumer in the market.”
[This news coupled with the CEOs of Target (TGT 0.00%↑), Walmart (WMT 0.00%↑), and Home Depot (HD 0.00%↑) mentioning impacts will be noted in weaker supply levels and likely increased prices in the coming weeks could push the Trump team to close deals quicker, seek de-escalation with China, especially if the public will feel it at the store not the stock market.]
The tariff volatility has helped keep the 30yr mortgage rate near 7%, dampening the would be good news of increased home sales (Mar/Feb) and increased number of homes built.
[Good to note that average home cost increased 1% to nearly $500k and homebuilding costs could increase by another 1% later this year due to tariffs.]
US Politics:
Despite a WSJ report stating Trump was contemplating reducing tariffs on China by nearly 50%, Bloomberg quoted Bessent stating that Trump did not offer a massive tariff reduction and has not began negotiations with China yet. Bessent dismissed Trump’s possible unilateral cuts as “surprising” noting that they may come down mutually but clarity could be as far out as the 3rd quarter. China stated, the door is open to talks.
[This highlights the continued lack of coordination between the administration heads and could be a “possible bit of gold” for traders who remember the White House dismissing news of the 90-day pause as “fake news” prior to claiming it was all part of the plan. Will history repeat itself so soon or was it simply miscommunication?]
Trump signed new executive orders targeting universities with a specific target of dismantling DEI programs with funding and accreditation penalties for noncompliance.
[Could improve: transparency in funding, support for HBCUs, accreditation accountability, and education alignment with workforce needs.
Could hurt: academic autonomy, stability of some institutions who don’t comply, and the trust of the gov’t/educational institution, or what’s left.]
12 new states join together and sue to stop what they call a ‘reckless and insane’ policy. They appear to be suing for the exact same reason as the California lawsuit launched by Newsom, basically abuse of IEEPA.
Severe cuts to NOAA has made their work growingly more difficult. More regional centers are set to be shuddered and upcoming research plans scrapped. Could pose significant ecological/environmental concerns for many if not correctly backfilled with AI monitoring systems which will likely be the case.
[Many of the actions share eerie parallels with the Project 2025 document that people have ascribed to Trump’s goals claiming NOAA was a main driver of the climate change alarm industry. However, Trump has never been a defender of the environment, so these actions seem economically motivated. Partner them with the DOGE plan to improve gov’t systems/technology and the cuts makes more sense.]
Global Politics:
The current draft of the US peace deal in Ukraine has shifted toward a very pro-Russian outlook. The current draft, per the Guardian, showed what each country would receive:
Russia: Recognition of control of Crimea, control of its current territorial occupation of Ukraine (nearly 20% of the country), assurance Ukraine can’t join NATO, and possible sanctions relief for the energy sector.
Ukraine: Gets security guarantee from those in the EU, the use of the river they would be giving up territorially (Dnipro), and they can also join the EU.
However Russia will not accept a deal that includes an EU peacekeeping force inside Ukraine and Ukraine does not want to give up much of its country…so things have stalled.
British official Rachel Reeves states the UK will not lower standards or rush to make a trade deal with the US. She did however note that Trump and team did have an important point around some global trade imbalances. They also mirrored a Trump policy to limit the dumping of cheaper goods by China.
[Though the language is rough around the edges it concedes that Trump has a point in his efforts and could indicate a willing negotiation participant.]
Technology:
EU regulators fine Apple AAPL 0.00%↑ $570M and META 0.00%↑ $230M for violating the Digital Markets Act, which curbs monopolies. Apple limited developer communication; Meta forced data consent or paid subscriptions. The U.S. condemned the penalties as unfair targeting of American firms.
[This comes as both firms face lawsuits in the US for monopolistic activities, including Google GOOG 0.00%↑. Worth noting in the EU, Reuters openly cautioning that Google could face a similar fate for its adtech business and X could see pressures. Could spur retaliation in US via tariff pressures or similar actions to limit what would otherwise be a steady stream of lawsuits.]
TSMC TSM 0.00%↑ showcased new technology which allows them to make 15% faster chips that use less power. The “A14” manufacturing tech will arrive in 2028.
Video Games:
Per Gamespot, Microsoft (MSFT 0.00%↑) announced the Xbox app is available on some LG tvs which would allow you to play games without an Xbox. This is part of their new “This is an Xbox” campaign.
[Genius partnership opportunities unveiling allowing xbox to become more aligned with Steam, albeit a much less dedicated fan base. Allows them to expand capture of the casual gamer, increase playtimes/availability for addicts.]
Per Kotaku, Nintendo is already apologizing for not having enough Switch 2s to meet the preorder demand in Japan alone. Demand “far exceeds” our expectations and ability to deliver to the country. US fans will have to hope they improve production by the time its to be released here, though there have been reports Nintendo shifted large quantities of product to the US already to avoid tariff conflicts.
Culture:
Taylor Swift no longer holds the title of world’s youngest self-made female billionaire as Lucy Guo, co-founder of Scale AI, has taken her place.