NEWS
Don't Watch the Mouth — Watch The Hands
Hannibal Buress Reaction - GIPHY
The market ended the week at a loss, falling slightly on Friday as investors try to price out the first trade deal with the UK, wait for trade talks over the weekend, and reason with a Federal Funds rate that is not changing any time soon.
President Trump said that he would not pre-cut tariffs on China, but today, he said that maybe 80% would be a better starting place, but we’ll have to wait and see what they up with. The UK deal was touted as a win, but nearly all imports from the UK will still see 10% tariffs. So much for the price of orange chocolates.
Today's issue covers Google’s in hot water, and The Trade Desk loves it, what to expect from China talks, and more.
Here’s the S&P 500 heatmap. 5 of 11 sectors closed green, with consumer discretionary (+0.48%) leading and health care (-1.09%) lagging.
S&P 500 Map - finviz
And here are the closing prices:
S&P 500 | 5,660 | -0.07% |
Nasdaq | 17,929 | flat |
Russell 2000 | 2,023 | -0.16% |
Dow Jones | 41,249 | -0.29% |
NEWS
Look Out, Google, The Sharks Are Circling The Mag Seven
There are signs the rest of the market is looking for any opening they can find into the trillion-dollar market cap club. The Mag Seven pulled the entire market higher in the past year, but firms feeling left out have to find a way in.
The Trade Desk $TTD ( ▲ 18.6% ) posted strong Q1 results, with EPS of $0.33, beating the expected $0.25, and revenue of $616 million, exceeding the forecast of $575.31 million. Despite the beat, the company guided for $682 million in Q2 revenue, reflecting 17% YoY growth, which is lower due to the absence of political ad spend. Still, the advertising technology firm stands to win big depending on a court case attempting to break up its largest rival $GOOG ( ▼ 0.88% ).
Trade Desk Chief Jeff Greene, a long-term Google critic, said on the company’s call that Google’s focus has long shifted toward YouTube and AI search, and ‘open internet’ searches have become far less important.
“I'm confident that one way or another, Google will exit the open Internet. If you think about it, most of their antitrust and regulatory problems come from how they managed the open Internet in the past,” Greene said. “I think Google will leave a very big hole eventually, which is a big opportunity for the rest of us in the open Internet.”
Greene said Google has been the biggest block to the internet supply chain, but he expects it to change this year or next.
Google recently faced a major shake-up. In a massive antitrust trial that wrapped up Friday, the firm was ordered to share its advertising and search data and stop the practice of implementing deals that pay for its engine to show up in tech products, like Apple’s Safari. The District Court of Virginia, in United States et al. v. Google, found the internet giant violated antitrust law by monopolizing the open-web digital advertising markets.
What To Expect When You’re Expecting
Trump said he was thinking about 80% tariffs on China, in a last throwaway comment before he escaped to play golf for the weekend while Treasury Secretary Bessent goes to work (hopefully) negotiating trade deals in Switzerland.
Earlier this week, Trump said he would not bring down tariffs at all before the meeting. Of course, both the U.S. and China have already lowered their initial salvos of tariffs, about a quarter of the way lower.
Columnist David M. Drucker wrote in Bloomberg this week, he has learned to survive as a political columnist by not listening to what Trump says.
Don’t watch the mouth, watch the hands.
So, learning from the UK deal, what can the market expect from Bessent bickering near Basel?
Well, Trump and the UK developed more of a proto deal- it still has 10% tariffs, besides on metals and the first 100k Aston Martins. On the positive side, Columnist Allison Schrager said the agreement eliminates Non-Tariff Restrictions, or NTBs. The UK agreed to fast-track U.S. goods through customs, and that’s a win for both nations.
The IMF estimated that eliminating NTBs with all of the EU would increase trade by up to 5%. Maybe if China and the U.S. talks start similarly, the two nations can take down trade barriers? Though in tariff warfare, with two sides separated by trenches 145% and 125% wide, 5% would not go very far. Based on last year’s numbers, trade between the U.S. and China amounted to $582B. Under current tariffs, it would cost $1-$1.5T to trade last year’s goods.
Fed speak
Federal Reserve Governor Michael Barrwarned that recent tariff increases could lead to higher inflation and slower economic growth, citing disruptions to global supply chains. He emphasized that small businesses may face the greatest challenges, as they struggle to adapt to shifting trade policies and rising costs.
More Money More Problems
In other news about money, Trump said he supported raising taxes on the rich by a little, as his party explored ways to pay for the hefty “Big Beautiful Bill” they are writing in Congress. The current rate of top income earnings is 37%, and Trump told Speaker Johnson to consider raising it back to 39.6%. The GOP aims to cut trillions in taxes with tax breaks, both old and new, like the proposed cuts to overtime taxes. If they fail to find a way to pay for it, everyone loses, and we all get tax increases.
STOCKS
Other Noteworthy Pops & Drops
Akamai Technologies $AKAM ( ▼ 10.76% )fell the most on the S&P 500 after reporting Q1 revenue of $915M, missing estimates of $930M, while SoundHound AI $SOUN ( ▼ 7.8% ) dropped 3.8% following a mixed earnings report. SoundHound reaffirmed its FY25 revenue guidance of $157M–$177M, despite missing Q1 revenue expectations.
Lyft $LYFT ( ▲ 28.08% ) surged to a five-month high after Engine Capital ended its activist campaign following Lyft’s expanded $750M stock buyback program. The company plans to deploy $500M over the next 12 months, with analysts upgrading the stock on improved financial outlook.
Coinbase $COIN ( ▼ 3.48% ) received mixed reactions from Wall Street after reporting Q1 earnings of $2.03B, slightly missing estimates of $2.08B, with adjusted EPS at $1.94 versus the expected $1.93. The company also announced a $2.9B acquisition of crypto derivatives exchange Deribit, aiming to expand its global presence in digital asset trading.
Rocket Companies $RKT ( ▼ 4.64% ) stock slipped after the company forecast Q2 revenue between $1.175B and $1.325B, missing analysts’ expectations of $1.36B. CEO Varun Krishna cited tariff uncertainty and a delayed homebuying season as key factors impacting demand.
Affirm Holdings $AFRM ( ▼ 14.47% ) stock fell after the company projected Q4 revenue between $815M and $845M, below analysts’ expectations of $841M. CFO Rob O’Hare noted that growth rates were elevated in April but are expected to moderate moving forward.
Alphabet $GOOGL ( ▼ 0.99% ) agreed to pay $50M to settle a class-action lawsuit alleging systemic racial discrimination against Black employees. The settlement covers over 4,000 workers and follows claims that Google steered Black employees into lower-level roles and paid them less than their peers.
AstraZeneca $AZN ( ▲ 0.4% ) reported positive results from its late-stage POTOMAC trial evaluating Imfinzi in high-risk non-muscle-invasive bladder cancer. The study showed a statistically significant improvement in disease-free survival with Imfinzi plus BCG therapy compared to BCG alone.
Boeing $BA ( ▲ 1.64% ) received a price target increase from UBS to $226 from $207, citing improved free cash flow outlook and tariff risk management. The analyst noted Boeing’s proactive approach to supply chain continuity and its ability to absorb potential tariff impacts.
Ripple $XRP.X ( ▲ 3.06% ) reached a settlement with the SEC, reducing its penalty from $125M to $50M, with the remaining funds returned to Ripple. XRP surged 8% following the announcement, hitting a two-month high of $2.4.
Johnson & Johnson $JNJ ( ▼ 0.93% )announced that its experimental psoriasis drug, icotrokinra, met the primary goal in a late-stage study, with 66% of scalp psoriasis patients and 77% of genital psoriasis patients achieving clear or almost clear skin. The company highlighted the drug’s potential to set a new standard in plaque psoriasis treatment, with retail sentiment remaining neutral.
Wolfspeed $WOLF ( ▼ 25.96% )plummeted after warning it may add "going concern" language to its upcoming SEC filing, signaling financial distress. Citi and JPMorgan downgraded the stock, citing liquidity risks, missed earnings, and uncertainty over CHIPS Act funding.
InspireMD $NSPR ( 0.0% ) reported a Q1 net loss of $11.17M (-$0.22 per share), wider than the expected -$0.20 per share. Revenue increased 1.2% YoY to $1.52M, driven by continued adoption of its CGuard technology.