CPI cools, stocks soar, NVDA surges on Saudi chip deal as Trump bolsters US-Saudi ties

• CPI cools! Stocks rally.
• Trump and Co. attend the Saudi/US Investment Forum.
• Crown Prince MBS commits to buy ‘several hundred thousand’ NVDA chips! NVDA surges by 5.6%.
• Bonds down, Oil UP, Gold churns.
• More hard data tomorrow – PPI and Retail Sales.
• Try Creamy Chicken & Potatoes.

And the band played on…..at 8:30 am – we learned that CPI came in better than expected – meaning it was weaker, the lowest level since 2021, showing that inflation continues to FALL not RISE – and that is good!

Stocks rose - with the exception of UNH – a Dow name that fell 18% or $67/share (taking 415 pts off the Dow) after the current CEO – Andy Witty - stepped down for personal reasons as the company withdrew any guidance for 2025 citing higher then expected medical costs. Chairman Stevey Hemsley is taking over and offered this apology.

“I’m deeply disappointed in and apologize for the performance setbacks we have encountered from both external and internal challenges. May of the issues standing in the way of achieving our goals are largely within our control. I am optimistic about our future as these issues are within our capacity to resolve. We will approach them with humility, rigor and urgency.”

Thanks for apology, but it did nothing for the Dow – which fell 269 pts to end the day down 0.6% while the S&P rose 42 pts (putting it back in positive territory for the year), the Nasdaq added 301 pts or 1.6%, the Russell gained 10 pts or 0.5%, the Transports added 40 pts or 0.25%, the Equal Weight S&P up 16 pts or 0.25% while the Mag 7 index surged by 564 pts or 2.25%.

The move in the Mag 7 driven by NVDA which rose 5.6% or $7 after the Saudi’s made a ‘BIG’ commitment to purchase ‘several hundred thousand’ NVDA chips – their most advanced processors over the next 5 years and they are starting with 18k GB300 chips and InfiniBand Networking Technology for a massive data center project.

Now, in case you were asleep yesterday - Trump and his entourage made their way to Saudi Arabia to attend the Saudi/US Investment Forum aimed to bring together major Saudi and American investors to strengthen economic ties. Trump was the featured speaker, joined by prominent U.S. business leaders like Elon Musk (CEO of X), Larry Fink (BlackRock), and Jensen Huang (Nvidia), Jamie Dimon (JPM) & Stephen Schwarzman (BlackStone). The forum focused on investment opportunities in sectors like energy, defense, infrastructure, healthcare, and artificial intelligence.

During the event, Trump announced a $600 billion investment commitment from Saudi Arabia to the U.S., including a $142 billion defense partnership involving arms sales to modernize Saudi Arabia’s military with advanced equipment and services from U.S. defense firms. He also announced plans to lift sanctions on Syria to support its new government post-Assad, he wants the Saudis to join the Abraham Accords, and he even offered an olive branch to the Iranians. Prior to the event - Trump met with MBS where they signed agreements covering energy, defense, and other areas. It was a good day. This morning, he landed in Doha, Qatar and then onto the UAE – where he is considering a deal that will allow them to import more than 1 million advanced NVDA chips as well. NVDA is quoted up another $3 or 2.3% at $132.25.

Bonds have now given back any of this year’s gains as investors finally appear to be accepting the fact that the FED is going to stay put (do nothing) at least until we get more clarity on what all this means for the economy. Former FED Vice Chair Roger Ferguson tried to make it clear by saying.

“I think the wait and see posture at this stage is still merited until we’re sure that we’re getting progress and that the uncertainty about tariffs starts to recede a bit.”

Bingo! Rates are not going anywhere…the hard economic data remains strong, inflation is subsiding, unemployment remains near historic lows, corporate earnings have not collapsed, guidance (for the most part) was not a disaster and rates are not usurious.

TLT & TLH lost 0.4% taking them down 1.6% and 0.6% ytd. The 2-yr yield is now 3.99% and the 10 yr is 4.45%.

Gold continues to churn in the low $3200’s -… down from $3509 only weeks ago. This as the tension cools and the flight to safety trade is unwound in favor of investing in stocks. Trendline support is at $3,167 – a level I expect us to test in the days ahead as long as the headlines remain positive – should any of the recent headlines prove untrue – then watch as gold surges again and stocks retreat – something I do not think will happen.

Oil surged again yesterday – rising $1.70 or 2.7% - to kiss trendline resistance - as investors bet that energy demand and economic activity is going to surge on the back of the tariff cuts. Oil is currently trading at $62.89 – down 70 cts this morning after failing to pierce the trendline as OPEC+ raises production/exports – limiting upside moves. I think we remain in the $60/$64 trading range – but if it pierces resistance ($64) I think it will be temporary.

Eco data today is about mortgage apps nothing else. But tomorrow it is about much more. Retail Sales m/m are on the docket, and they are expected to be flat for April. Ex Autos and Gas + 0.3%. Recall that last month retail sales surged by 1.4% (a big move) so let’s see if they are surprised again. We will also get the latest PPI report and that is inflation at the producer level. This report is also NOT expected to surprise us but if we see a weaker PPI – like we did with CPI – that will only add fuel to the fire…..Remember – PPI leads CPI – so if that is weaker this month then that means we can expect CPI next month to be better again….Oh boy, - now this is getting exciting.

US futures are churning…..Dow futures are teasing the flat line, S&P’s up 2, Nasdaq +20 while the Russell is down 10. Expect the excitement to continue as the markets and investors digest the recent surge higher and consider what’s next.

European markets are also churning…. a bit lower…. after 4 days of UP. No surprise there.

The S&P closed at 5886 up 42 pts…. We are now well above the last trendline….at 5772…. which leaves us open to test 6000 – for no reason other than it’s a big round number representing another century mark. My gut says that the snapback has been too swift and too fast, and I suspect that we will test the long term trendline before the month is over. The key would be for us to hold that line…..should we fail, the algo’s won’t like it and would put pressure on stocks to see if the bulls defend the position.

One pan creamy chicken breasts (or thighs) and potatoes

This is a simple 40 min dinner – using just one oven proof sauté pan.

For this you need: boneless skinless breasts/thighs, small yellow potatoes, garlic, onions, shallots, Dijon mustard, heavy cream, white wine, butter, olive oil, parmegiana cheese and s&p or you can use Adobo (a Spanish seasoning).

Preheat your oven to 375 degrees.

Season the chicken – set aside. Slice the baby potatoes in half and season those with the same seasoning.

Now in the sauté pan – melt ½ stick of butter – and brown the chicken – no need to fully cook them – they will finish in the oven. When you are done with the chicken – add the potatoes to the same pan and toss them a bit to get some color – about 10 mins. Now remove the potatoes.

In the same pan – add more butter and a squirt of olive oil. Add in the shallots, garlic and chopped onion. Sauté for 8 mins. Add a splash (1/2 c) of white wine to deglaze the pan.

Now add 1 tblspn of Dijon and 1 c of heavy cream, a handful of cheese and season with s&p. Stir to mix. Now add back the chicken and potatoes – stir to coat.

Now place the pot in the oven – covered for 10 mins and then uncovered for another 10 mins. Remove and serve.