Stocks churn as trade talks teeter – Fed goes silent ahead of CPI and PPI

• Stocks churned as we wait for more clarity from Scotty.
• Timmy fails to excite – Apple trades lower.
• Lonnie makes back some of his money as ‘the feud’ calms. TSLA +$13.
• We are now in the official ‘blackout period’ for the FED voting members.
• CPI and PPI later this week.
• Try the Italian Style Pork Chops.

Stocks struggled to ‘eke out’ gains – as investors, traders and algo’s tried to be optimistic about the trade talks taking place in London…Scotty telling us that they were ‘making progress’ and that the talks will continue into Tuesday. Howie (Lutnick) chiming in – adding that the talks have been ‘fruitful.’ Now I’m just waiting for him to tell us that they had ‘juicy results. All while Donny told us that all he’s getting is ‘good reports! Just to be clear – they aren’t even talking tariffs – they are talking Tech and Rare Earths.

And then Timmy (Cook) underwhelmed us at the annual Apple Worldwide Developers Conference – after he failed to inspire developers on software updates and AI advancements…..Apple lost $2.50 or 1.25% and this morning – AAPL continues to just churn.

Lonnie (Musk) had a win – Trump telling us that he is not cancelling Starlink’s internet service into the WH while wishing Musk well after their recent very public spat…..TSLA gained more than 4.5% or $13 to end the day at $308.58 – and the good wishes continue this morning as traders and investors are taking TSLA up another $8 to $316/sh in pre-mkt trading. This after Donny decided to not sell his red Tesla that has been parked in the WH driveway since February. But investors should be cautious as Senate Republicans are considering a proposal to eliminate penalties for NOT abiding by fuel efficiency standards – rendering the regulatory credits that TSLA depends on useless. Just to be clear – those credits were worth $2.67 billion to Musk in 2024. Now the move higher this morning – takes TSLA right back up and thru all 3 trendlines – appearing as if it wants to challenge the recent May high of $365.

So, by the end of the day – the Dow gave up 1 pts, the S&P up 5 pts, the Nasdaq up 61 pts, the Russell up 12 pts, the Transports gained 99 pts, the Equal Weighted S&P closed up less than 1 pt while the Mag 7 was the clear winner again up 250 pts or 1%.

Bonds didn’t do much – both the TLT and TLH gained 0.1% - yields remain a bit elevated but are not an issue. The 10 yr is yielding 4.45% and while that is down from last week my sense is that we should not be surprised if we see them rise. I discussed this and so much more with Liz Claman yesterday on the Claman Countdown – You can find this by clicking on the link below.

Oil continues to advance – slowly but advance all the same. Yesterday it was up 50 cts and this morning it is up another 10 cts at $65.40/barrel. We are now up and through the intermediate term trendline leaving us just $2 away from kissing and potentially piercing the long term trendline at $67.05. Now, pay attention – rising oil prices in the face of increasing supply (OPEC+ raising production) is bullish…. Why? Because it suggests that there is plenty of demand…..if demand were waning in the face of more supply, the price of oil would be $50, not $65. A close above $65.45 will set us up to test the April highs of $70.

Gold had an active day yesterday – trading in a $30 range from a low of $3,320 and a high of $3,355 ending the day at $3,350. This morning it is unchanged as it tries to figure out what’s next. The support trendline drawn from the low of April ($3000) and the resistance trendline drawn from the high of April ($3549) confirms that we remain in the trading range of $3325/$3425. As we move into the triangle though,, we will have to break out or break down – that move will depend on what we hear on the trade talk front and what we hear from JJ next week.

And speaking of JJ and what the FOMC decision will be – I am not expecting them to do anything. We are now in the ‘quiet period’, the ‘blackout period’ where voting members of the FOMC committee can no longer speak to the media – the meeting begins next Tuesday and finishes on Wednesday – so the only ones we can hear from are the ‘non-members’ that supposedly have no insight and of course the ‘deep throats’ – Nicky T of the WSJ and our friends at Goldman. Keep you eyes and ears open – because if we hear from Neely Kashkari (Pres of the Minneapolis FED and a non-voting member) or if Nicky writes an article for the WSJ or Goldman publishes a ‘Special Report’ that suggests otherwise, it’s because someone (JJ) whispered in their ear about a ‘change of heart’…..and they do not want the market to be surprised….Capisce? But to be clear – the FED is not cutting rates next week or next month or later this year UNLESS the economic data circles the drain.

Again – the key events this week are the CPI and PPI – we discussed this yesterday, I am not expecting any upside surprise beyond what the estimates are, but I continue to expect caution going forward about what the tariffs could potentially create. So, it’s all systems go for now.

US futures are (again) mixed…. Dow futures down 11, S&P’s up 6, Nasdaq up 24 and the Russell up 8. It feels a bit tired to me….so I expect the churn to continue as we wait for any news out of London over US /China trade talks. Comments out of China this morning seem to contradict what Scotty and Howie are telling the President and us…. China is not so sure that the talks are as ‘peachy’ as Howie suggested, so as you might expect,, that just leaves us in limbo. And what happened to trade talks with all the other countries? Is that all settled? Hardly, but no one seems to be talking about it any longer. Nothing about the EU, nothing about India, or South Korea or Japan. China talks are sucking the air out of the room – are we to assume that everyone else is ‘ok’?

In addition – we have the ongoing Iran nuclear talks - what’s up with that? Trump says no enrichment and Iran says no deal….and don’t’ forget – we still have the Ukraine/Russian war and the ongoing conflict in the Mid-East… never mind the threat of a China/Taiwan conflict. So, all I am saying is – keep you eye on the ball – do not get lulled into complacency.

European markets are all trading a bit lower…… This morning, we learned that the Brits are cutting spending…. on ‘non-essential’ items. So think consumer discretionary vs. consumer staples. In the last month Total Retail Sales were up 1%, food sales up 3.6% but ‘non- food’ sales fell by 1.1% y/y,, suggesting that they are pressing on the brakes for things they don’t NEED. (Econ 101 – Wants vs. Needs – Discretionary vs. Staples).

The S&P closed at 6005 up 5 pts – this after trading as high as 6,021. Again, suggesting to me that the market is tired. I still think we are a bit overbought – the RSI confirms that as it continues to bump its head on the overbot line. Pay attention to the CPI and PPI and what it says about inflation. Watch for any development on US/China trade and pay attention to anything concerning the next FOMC meeting. My gut says sit back – no need to rush to do anything. You are invested and your cash in earning 4.25% risk-free.

Italian style pork chops

These are staple dishes in my home. Easy to make and so good.

For this you need – center cut pork chops – ½ inch thick. Seasoned breadcrumbs – (both Parmegiana and Romano cheese, onion powder, garlic powder, s&p, and parsley.) Chicken stock, Eggs, flour, olive oil & butter.

Begin by preheating your oven to 375 degrees. Set up an assembly line in 3 separate bowls. – flour, egg wash and the breadcrumbs.

Rinse the chops – pat dry.

Dredge the chops in flour, then dip in an egg wash and then coat with the breadcrumbs.

Now – in a large sauté pan – heat up a splash of olive oil and ½ stick of butter.

Add the chops to the pan and sear and brown on both sides. Now the place is a baking dish.

Go back to the sauté pan and add another dollop of butter and some chicken stock (you can also use white wine if you prefer). Once the butter melts and the stock heats up – pour it over the chops just so they are bathing in the sauce, no swimming.

Cover with foil and place in the oven. Cook for another 20 mins.

Remove – let cool for 5 mins and then serve with a large mixed salad.