10 Things You Need to Know – Trump vs. Musk Edition
What a week! We just saw:
- President Trump and Elon Musk enter a war of very unkind words
- President Trump make nice with China
- A surprise catalyst for the “Ultimate Trump Trade”
- A better-than-expected jobs report
- A sign of life in a “left for dead” sector
And a whole lot more! So let's dig into the 10 Things You Need to Know About Markets Right Now:
1. President Trump and Elon Musk Went to War
Elon Musk went to war with President Trump this week thanks to the “big beautiful bull” being stuffed with more pork than a bacon convention.
Musk did not hold back, with these messages getting over 260 million views on Twitter.
Tesla (TSLA) stock took a beating, dropping 14% this week while tech stocks were up.
However, the President did not go scorched-earth in response, and news reports indicate that Trump and Musk might reconcile.
And, a CNN source reported that President Trump told Vice President JD Vance to “speak diplomatically” about the mess.
So in keeping with the news flow rollercoaster, maybe Trump and Musk will make nice a la Zoolander and Hansel:
Tesla longs are hoping for that.
2. We Need to Give Sami Abusaad a Shout-Out
Last weekend, Sami said the market was heading back to all-time highs.
Sami said:
- Forget the news flow
- Forget bond yields
- Forget the futures markets
And just focus on the price action.
As we write this on Friday at 1:27 pm ET, SPY is up 1.5% for the week and QQQ is up over 2%.
By the way, Sami put 54% of his IRA into a very unusual ETF.
3. The Economy Is Alive and Kicking
While the doomsday crowd expects the US economy to fold because of tariff-related strife… things are humming along.
Friday's nonfarm payrolls report was better-than-expected.
Traders were bracing for a mess because of Wednesday's weak ADP report.
But the US economy remains alive and kicking.
Another positive sign: JOLTS Job Openings came in above expectations, meaning US companies are still looking to hire.
4. The Mood Is Still Sour
AAII Sentiment came in at 32.7% bullish this week, in-line with last week's reading.
This is well off the February and March lows, which preceded “Liberation Day,” which sent the US-China conflict into high gear.
However, we're still below the 37.5% long-term average.
In fact, we haven't had an above-average reading since January 29.
So the mood remains sour.
5. The Ultimate Trump Trade Gets a New Catalyst
We've talked extensively about the huge outperformance in stocks that benefit from financial market volatility, namely:
- Robinhood (HOOD): +189% since the election
- Interactive Brokers (IBKR): +34%
- Coinbase (COIN): +32%
- Charles Schwab (SCHW): +24%
But a new catalyst for two of these names may be on the horizon.
S&P Global will report new additions to the S&P 500 after the close on Friday.
And Robinhood (HOOD) and Interactive Brokers (IBKR) both have a chance to be added by virtue of their large market caps – $67 billion for HOOD and $90 billion for IBKR.
6. Left-for-Dead Biotech Shows a Sign of Life
Biotech has been a mess for over a decade.
Over the last 10 years, SPY is up 240%. And XBI is up 5%>
BUT… XBI managed to rally over 6% this week.
Traders have been burned for years buying biotech dips.
Could this be the turning point?
It's hard to say – but keep this group on your radar.
7. Q2 Earnings Expectations Are Crazy Low
Q1 earnings season was an unqualified success, with 78% of S&P 500 companies exceeding earnings expectations, according to FactSet.
And here's the good news for Q2 – estimates are dropping like a rock.
On March 31, analysts forecast 9.3% EPS growth for Q2.
Today it's 4.9%.
Is that crazy low? Yes.
Is it convenient? Yes, again.
When the bar is low, it's easy for companies to beat expectations.
8. Bitcoin Is Taking a Nap
Bitcoin went on a wild rally off the April lows.
Last week, we asked whether Bitcoin needed a nap because of weakness in MicroStrategy (MSTR) and GameStop's (GME) Bitcoin purchase announcement, which spurred a sell-the-news reaction.
Turns out, we should have shorted Bitcoin because it's under pressure:
Is this a disaster?
Nah.
Bitcoin went up 50% in a straight line. It deserved a nap.
9. It's Still a Trader's Market
David Prince of T3 Live's Inner Circle community argues that you need to have your trader hat on.
[IMPORTANT: David is hosting a webinar which you can sign up for here.]And with the market grinding higher, the best opportunities are “under the hood.”
See what he means:
10. You Need Some Gratitude!
Friday marked the 81st anniversary of the D-Day landing on the beaches of Normandy, France.
If not for the 150,000+ brave souls from around the world that risked it all, we might not be here.
Be grateful!
And watch Saving Private Ryan this weekend.
I once worked for a former Army Officer who survived the assault. He said it was the most realistic depiction of Normandy that he ever saw.
Rest in peace, Mr. Duffy.
Have a great weekend folks.
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