Summing Up The Week

There’s no sense in bearing the lead – the announced progress in the U.S.-China trade talks drove the markets significantly higher this week when the two countries announced a 90-day tariff pause on Monday. This sent the S&P 500 up more than +3.5% and the Nasdaq up more than +4.5%, another reason why investors should never, ever panic sell.

Additionally, inflation delivered a surprise, too, as data came in cooler than expected from April when the whisper number from economists was that we should see a huge spike in inflation due to tariff fears. The reality was the exact opposite. 

With that, let’s take a deeper dive into the news that moved markets this week…

Market News

U.S. and China agree to slash tariffs for 90 days

On Monday, the United States and China agreed to suspend most of the tariffs on each other’s goods in a major trade breakthrough, reported CNBC. The trade agreement cut the tariffs from 125% to 10% with 20% duties on Chinese imports on fentanyl remaining in place, leaving China’s total tariff at 30%.

The breakthrough comes after U.S. and China trade representatives held high-stakes talks in Switzerland over the weekend. “We had very productive talks and I believe that the venue, here in Lake Geneva, added great equanimity to what was a very positive process,” said U.S. Treasury Secretary Scott Bessent in a news conference. “We have reached an agreement on a 90-day pause and substantially move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115%.”

As a result, the stock market saw an explosive rally at the open on Monday with the S&P 500 opening up more than +2.50% and the Nasdaq up more than +4.00% at the open.

Annual inflation hit 2.3% in April, lower than expected

Despite many “expert” economists expecting an increase in the inflation rate in April due Trump’s tariffs, on Tuesday, we discovered the opposite happened as the Consumer Price Index (CPI) rose just 0.2% in April giving an annual inflation rate of 2.3%, with experts expecting an annual rate of 2.4%, reported CNBC.

As a result, the markets, which had been in the red in extended-hours trading, flipped to green and began to rally to start Tuesday.

Powell warns of higher rates due to “supply shocks”

On Thursday, Federal Reserve Chairman Jerome Powell threw cold water on the market rally by warning of likely higher longer-term interest rates due to the economy changes and policy in flux, reported CNBC.

“Higher real rates may also reflect the possibility that inflation could be more volatile going forward than in the inter-crisis period of the 2010s,” Powell said in prepared remarks for the Thomas Laubach Research Conference in Washington, D.C. “We may be entering a period of more frequent, and potentially more persistent, supply shocks — a difficult challenge for the economy and for central banks.”

Powell went on to make comments about the need for the Fed to become forward-looking. “In our discussions so far, participants have indicated that they thought it would be appropriate to reconsider the language around shortfalls,” he said. “And at our meeting last week, we had a similar take on average inflation targeting. We will ensure that our new consensus statement is robust to a wide range of economic environments and developments.”

Consumer sentiment falls in May over potential tariff inflation

On Friday, the University of Michigan’s Consumer Sentiment Survey showed consumers are becoming increasingly worried about higher inflation as a result of Trump’s tariffs, reported CNBC. The index dropped 50.8 in May from 52.2 in April and is the second-lowest reading on record, just behind June 2022.

“Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy,””Surveys of Consumers director Joanne Hsu said in the release.

This result surprised no one as it was the logical conclusion of the potential tariff rates would cause significant increases to the cost of pretty much all imported consumer goods. As a result, the S&P 500 remained flat at the open following the release of the data.

Next Week’s Gameplan

After what seems like weeks (if not months) of never-ending news catalysts filling every day, next week will run into a drought – at least of planned news catalysts. There’s a brief bit of Fedspeak on Monday and Tuesday, but the only real datapoints to speak of are lackluster, at best – flash services and manufacturing PMI along with existing home sales on Thursday followed by new home sales on Friday.

That being said, the real headline drivers have been the unexpected news stories related to trade and geopolitical uncertainty, and there’s always more than enough room for a few of those to smack markets around once more. 

Plus, believe it or not, we’re not completely through earnings season, either. I have a couple of big positions for my portfolios reporting next week including Palo Alto Networks (PANW) on Tuesday after the market close and Snowflake (SNOW) on Wednesday following the closing bell.

As always, there will be more than enough to talk about when I see you back here next Friday, friends! 

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Crytpo Corner

Bitcoin Price Action

Bitcoin’s trading in a range, but what a range it is!

Bitcoin continued its rally from last week, breaking through the weekly high at $104,352.60 before finding resistance at $105.787.37 on Sunday. The big orange crypto reversed and made its weekly low the same day at $100,703.71.

Now, it appears that Bitcoin’s trading in a range of $100K-$105K, and, considering we were under $75K just a month ago, that’s nothing to complain about at all!

The Bullish Case

Bulls remain in control of the narrative at this point. Bitcoin’s stellar 40%+ rally off its April low to its recent high is the perfect demonstration of why the Bulls believe in Bitcoin so much. Many Bulls argue Bitcoin’s new all-time high is just a matter of weeks or even days away.

The Bearish Case

Bears struggle to come up with convincing narratives as to why Bitcoin rallied so much. Many continue to argue that without a new all-time high, Bitcoin is simply trading in one heck of an oversold bounce Bear Market Rally. I think this thesis is a bit more than just a little far-fetched, but I would love to have another opportunity to buy Bitcoin in the 70Ks (heck, I’d be happy to buy it again in the 80K region…)

Bitcoin Trade Update

Premium subscribers to Get Irked get access to all the moves I’ve made in my Bitcoin trade over the past week as well as my next thirty (30) … yes, 30 … buys in Bitcoin including price levels, quantities, and a full layout of my ongoing long-term trade in the world’s biggest crypto.

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Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use my Gemini referral link to open an account.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.

While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are some of Bitcoin’s price movements over the past couple of years:

• In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
• Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
• In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
• In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
• In February 2020, Bitcoin rallied +64% to $10,522.51.
• In March , Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
• Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
• Later in January 2021, Bitcoin dropped -32% to a low of $28,732.00.
• In February, Bitcoin rallied +103% to a new all-time high of $58,367.00.
• Later in February, Bitcoin dropped -26% to a low of $43,016.00.
• In April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
• In June , Bitcoin crashed -56% to a low of $28,800.00.
• In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
• In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
• In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
• In June, Bitcoin dropped -20% to a low of $24,750.00
• In July, Bitcoin rallied +29% to a high of $31,862.21.
• In September, Bitcoin dropped -22% to a low of $24,900.00.
• In January 2024, Bitcoin rallied +97% to a high of $49,102.29.
• Later in January, Bitcoin dropped -22% to a low of $38,501.00.
• In March, Bitcoin rallied +92% to a new all-time high of $73,835.57.
• In August, Bitcoin dropped -33% to a low of $49,050.01.
• In January 2025, Bitcoin rallied +150% to a new all-time high of $109,358.01.
• In April, Bitcoin dropped -32% to a low of $74,420.69.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.