Things you need to know.

• FED Holds Pat. No Surprise at all.
• JJ makes NO promises in either direction.
• Trump Teases of a BIG Deal – Headlines Suggest UK/US Trade Deal.
• But there are also Peace Deals, Tax Deals, Energy Deals – Oh my!
• Futures Surge!
• Try the Chicken Diane

“FED HOLDS STEADY, CITING RISKS OF TARIFFS – Powell warns of the potential for higher inflation and slower growth” – wsj 5/8/25.

And there it is – not much more to say – even though I’m sure that is all we will hear today. The questions and ongoing analysis of his speech, what he said and how he said it. What words did he eliminate from the last statement and what words did he add? Was he more hawkish or dovish? This even as the press corps spent 60 mins questioning the chair, as they tried hard to get in his head – asking the same question many different ways trying to get a different answer. One reporter (clueless) even asked what he would say at the meeting next month! (I mean you can’t make this up!)

I was on Fox Business yesterday with Taylor Riggs and floor broker/Senior Managing Partner at Meridian Equity Partners – Jonathan Corpina on the Claman Countdown – you can find our discussion here:

https://video.foxbusiness.com/v/6372481733112

In any event. It was what it was, and it was exactly what the majority of investors expected and for anyone who was surprised – I’d say you’ve been living under a rock. In my opinion – he did not lean more or less hawkish nor more or less dovish. He walked the line and made NO promises. He warned – (and this was not new) – that the FED is concerned about tariffs raising the risk of higher unemployment (which it is not doing yet) and higher inflation – which it is also not happening yet – but tomorrow may change that argument when we get the April CPI – the Consumer Price Index. Our friends at Goldman though are still out there pushing for 3 – 25 bps cuts this year – all happening in the fall… Sept/Nov/Dec.

At the end of the day – the Dow added 285 pts or 0.7%, the S&P up 25 pts or 0.4%, the Nasdaq ahead by 50 pts or 0.3%, the Russell up 6 pts or 0.3%, the Transports added 98 pts or 0.7%, the Equal Weight S&P up 41 pts or 0.6% while the Mag 7 suffered a small loss – down 61 pts or 0.3% (but that is about to change today!).

And so, it was a good day – but I’m gonna go out on a limb and say it was not really because of the FED, nor was it because the conclave elected a Pope – they did not – but more around all the speculation of a ‘big deal’ that is soon to be announced by Donny and ‘the Osmonds’. (that’s a boomer reference).

At 3:51 pm – we got this headline from Bloomberg: (but someone clearly knew this was coming out) because at about 3:35 pm – NVDA (and the other chippers) shot higher….

“NVDA, Chip Stocks Gain on Report Trump is Set to Rescind Curbs” – it goes onto say that the Trump administration plans to rescind Biden-era AI chip curbs in a broader effort to revise semiconductor trade restrictions……

And while that is good news – that is not the BIG deal that they teased….

And the speculation ran rampant – was it a trade deal or something else? Now we all know that there is a tax deal in the works, we know that the US and UK are involved in ‘intensive talks’ surrounding a trade deal. We also know that Scotty is on his way to Switzerland (neutral country) to meet up with his counterpart from China to ‘de-escalate and turn down the temperature, we also know that Donny is going to Saudi Arabia this weekend (rumors are that he is renaming the Persian Gulf to the Arabian Gulf) to meet with Gulf Cooperation Council Leaders (Kuwait, Oman, Qatar, Saudi Arabia and the UAE) and that could be a range of potential issues. Iran Nuclear talks, Israel/Hamas (Iran) conflict discussions, Russia/Ukraine Peace Talks, Regional Stability and Gulf Cooperation discussions. Remember – it is shrouded in diplomatic secrecy due to security reasons – but clearly something is on the verge of being announced.

Trump Posts on Truth Social: ‘It will be a BIG day for the US and the United Kingdom’

Well – there it is….. ONE of these ‘issues’ is a breakthrough in UK/US diplomatic trade talks….and this would be the first ‘BIG’ deal to be made…..maybe it will become the blueprint going forward (or maybe not!) and markets in Europe and futures in the US are surging….The speculation is that Trump will announce a limited trade agreement – focusing on reducing tariffs on cars and steel and may include tech, AI and digital trade – but until we see it, we don’t really know what it looks like – BUT the initial reaction in the markets is positive.

Dow futures are up 350 pts, S&P’s up 60 pts, Nasdaq up 300 pts while the Russell is up 25 pts. (NVDA quoted up $2 or 1.8% at $119.15).

Now – Gold came under pressure yesterday – down $50 and is down $48 this morning. This is a direct result of the fact that JJ didn’t hit the ‘panic’ button and all the speculation around that ‘BIG’ deal. Remember – gold rallies when people are anxious – when they seek the safety of gold….and gold has had a massive move up on all of the chaos…. but the moment the chaos appears to calm down, so will gold. The move yesterday and again today – suggests to me that the markets are expecting exactly that. Gold is now trading back at $3,344 and remains in that $3200/$3500 range.

Oil continues to churn in the $55/$60 range – but it will be interesting to see what happens to oil next week -after the ‘summit’ this weekend – that’s assuming that the summit has something to do with energy….if not – then oil won’t do anything and will remain in that range. The Saudi’s have made it clear – they are increasing production and that will increase supply…so if you are betting on $70 oil – you might want to reconsider that. I say $50 before $70.

And Bonds…? They rose yesterday…the TLT and TLH both up 0.4% causing 2 yr yields to drop to 3.78% and 10 yr yields to 4.27% – although this morning – bonds are under pressure (sending yields up about 4 bps) as stock futures trade higher and the excitement builds. Remember – if we start to get solid trade deals – you can expect it to be ‘RISK ON” and money to pour back into stocks, so all those investors that ran for the safety of treasuries will sell bonds and buy stocks.

Eco data today includes Initial Jobless Claims and Continuing Claims – neither expected to surprise – we will also get Unit Labor Costs (ULC) and that my friends is expected to surge +5.1% vs. last months +2.2%. (not good)

Why Surging ULC Is Problematic:

Rising ULC often means wages are growing faster than productivity. This increases production costs, which businesses may pass on to consumers, fueling inflation. If companies can’t pass on higher costs (e.g., due to competition or weak demand), profit margins shrink, potentially leading to lower investment or layoffs. High ULC can make a country’s goods and services more expensive on the global market, hurting exports and economic growth. Surging ULC may prompt central banks (e.g., the Federal Reserve) to tighten monetary policy (raise interest rates) to curb inflation, which can slow economic growth. (BINGO!)

But it will be tomorrow’s eco data that will give us some insight into that. CPI is due out at 8:30 on Friday and the m/m numbers for both the top line and Core are expected to be UP, while the y/y numbers for both top and Core are expected to be unchanged….and the clock ticks.

European markets are all higher…. It is in hopes of a trade deal with the UK and the US. The BoE is also expected to announce a rate cut- but that is expected.

The S&P closed at 5,631 up 25 pts…Trendline support is 5561, trendline resistance is at 5747 while the most recent high was 5700….a level we will test early this morning…but my sense is that while the news is good, there is still a lot to consider….and a lot for the markets to digest. I suspect that the trendline will offer enough resistance to keep a lid on it…only because one deal does not make everything ‘ok’. And don’t forget the reconciliation bill that is still out there. A failure to pass this bill will see tax rates go higher for everyone and that won’t help investor psyche. So, while today’s news is good and it will help build the foundation that we need to repair the damage – let’s not overreact. For now, we remain in the 5561/5750 trading range. The bias is to the upside, but we know how that can change on a dime.

So, sit tight. NO need to chase anything….

Expect the excitement to continue…. stick to your plan and remain resilient –

Take good care,

[email protected]

Sources:  Bloomberg, CNBC, Reuters, Wall Street Journal

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The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.

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Chicken Diane –

While it sounds French – It is a classic American creation….

For this you need: Skinless/boneless thighs, mushrooms, parsley, chicken stock, s&p, butter, olive oil, shallots, heavy cream, lemon juice, parsley, brandy, mustard and a bit of Worcestershire sauce.

Begin by seasoning the thighs with s&p.

Now, in a large sauté pan, add a dollop of butter and some olive oil. Heat it up nicely and then add the seasoned thighs and cook until they are golden brown on both sides. Remove and set aside.

In the same pan, add ½ stick of butter, let it melt – add the sliced mushrooms and sauté for 5 mins…. now add the diced shallots sauté for another 3 mins.

Add 2 tbls of brandy and deglaze the pan. Brandy will evaporate in 30 seconds, now add 1/3 c heavy cream, ½ c chicken stock, a tsp of Dijon mustard, a squeeze of fresh lemon juice and a squirt of the Worcestershire sauce. Bring to a boil and then turn the heat to simmer – it should thicken up in about 3 – 5 mins. Add the chopped parsley, adjust with s&p. Add back the chicken and any juice & let the flavors blend.

Now, place the thigh on the plate and top with the thick brandy/cream sauce making sure to include the mushrooms.

Buon Appetito