The week was filled to the brim with crucial information, both at the macro level – several reports on the labor market, including the main one on Friday – and at the corporate level – quarterly reports from 180 S&P 500 companies, including four tech giants with a total capitalization of ten trillion dollars. You know, with so many events, each of which is a major catalyst for the entire market, anything could happen. But we have to admit that this week the market shrugged off fears and just shone with optimism, growing every day and showing skeptics that Trump is right when he says: “Things are going very well!”This is a quick review from Ivan Kompan, Edinburgh Business School analyst.
What’s fueling market optimism? Rumors of progress in U.S.-China tariff talks — supposedly someone’s about to make a call. Chinese state media claim the Trump administration quietly reached out to start trade negotiations. Publicly, Trump insists President Xi must make the first move. China responded: “If we fight, we fight to the end. If we talk, the door is open. But the U.S. must correct its mistakes and remove unilateral tariffs.” Markets saw this as progress and futures jumped.
Macroeconomic data weren’t encouraging. GDP fell for the first time in three years. Inflation (PCE) remains elevated. The labor market held up: 177,000 jobs added in April — better than expected but down from March. Unemployment stayed at 4.2%. Wage growth slightly missed forecasts.
Earnings from Apple, Microsoft, Meta, and Amazon all beat expectations. Microsoft and Meta (M&M), less exposed to tariffs, offered strong outlooks. Apple and Amazon (A&A), more vulnerable, warned of challenges ahead. Their shares fell despite Apple’s $100B buyback, while M&M shares soared.
Midweek, WSJ reported Tesla’s board had considered replacing Musk due to his time spent on DOGE. The board denied it, and Musk’s promise to refocus on Tesla may quiet concerns. Still, the idea of Tesla without Musk caused a stir. And of course, Trump. In Michigan, he said: “I have a Fed official not doing a very good job,” clearly aiming at Powell. A bold move that could backfire.
Bottom line: markets have rallied for ten straight days, with the S&P 500 above early April levels — odd, given the unresolved issues Trump created. The real tariff impact is likely coming: supply chain delays, empty shelves, and falling sales by June. Apollo warns of a likely recession if trends continue.
Yet greed is winning. Despite weak fundamentals and sky-high valuations — levels last seen during the dot-com bubble — traders keep buying. Growth may continue, but caution is more than justified right now.
*And finally, we would like to remind you that the information you have just listened to is not an investment advisory. Remember – investments in the stock market are always tied up with financial risks. So be careful and cautious.
