Good morning! Markets can change direction in an instant, particularly when investor sentiment is so volatile. One technical certainty we have this morning: The bull market is back.
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A new bull market is just the start of the US-China trade deal
Itâs not often the financial press warns of a new Great Depression and celebrates a fresh bull market in the same month.
On Monday, the Nasdaq Composite climbed more than 4%, lifting it 20% off its April lows to officially tip it into bull market territory.
For bears, it marked a stunning reversal from recent pessimism from consumers, institutional investors, and bond markets.
The bulls can thank the sudden tariff dĂŠtente between the US and China.
Each of the major US indexes spiked Monday (Chart: Wall Street Journal)
To be clear, the US-China trade deal is a tariff pause, not a permanent halt. The following will last for 90 days as negotiations continue:
Total US tariffs on Chinese goods will drop from 145% to 30%
Total Chinese tariffs on US goods will drop from 125% to 10%
The agreement marks an important, optimistic shift in the market narrative.
JPMorgan strategist Tai Hui said the agreed upon 90-day negotiation period may need to be extended further, but called the move a productive step.
âWe expect the market to get back on to a risk-on sentiment in the near-term,â he wrote in a note.
The sell-off in risk assets clearly had the attention of the White House. Recall that President Trump had acknowledged investorsâ nerves in early April, saying bond traders were âgetting yippyâ and âqueasyâ at the time.
Yet if pressure from markets raised the stakes for Washington to cut a deal, the same can be said of Beijing.
China faces a different, arguably more pressing set of domestic troubles. President Xi Jinping has been attempting to manage deflation, collapsing factory activity, and faltering consumer demand.
Data out this week revealed factory-gate prices in China have dropped for 31 months in a row.
China CPI and PPI point to a trend of deflation (Chart: Yardeni Research)
To Yardeni Research strategists, the nationâs troubling trajectory resembles that of Japan in the 1990s.
That suggests Chinese officials are looking for a tariff deal sooner than later.
âPresident Trumpâs tariffs are a hurricane-force headwind that China hardly needs,â Yardeni strategists told clients early Tuesday. âEven if Trumpâs claim that the China tariff will be slashed considerably holds, a 30% import tax is still no joke.â
Whether the tariff pause proves durable or not, it shows that financial markets still hold real geopolitical leverage.
In 90 days, investors will be hard pressed to relinquish that power.
đ°ď¸Â Tariff receipts hit a record $16 billion in April. Total customs duties surged 86% higher than the prior month, and came more than double that $7.1 billion seen a year ago. That brought year-to-date total for the duties to $63.3 billion, more than 18% ahead of the same period in 2024. (CNBC)
đ Trumpâs executive order can reshape the US pharma industry. The White Houseâs move Monday is set to restructure how Americans buy prescription drugs, pushing them away from insurers and pharmacy-benefit managers and toward cash-pay options. (Barronâs)
đď¸Â Over 120,000 leaders trust this global affairs newsletter. Dedicated to clarity over clickbait and designed by former diplomats, International Intrigue helps you stay informed in under 5 minutes a day. Join Pentagon officials and changemakers â sign up free here.Â
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Last thing
Anthony Pompliano đŞ @APompliano
Stocks are in a bull market again.
Imagine being one of the people predicting the Great Depression a few weeks ago…
8:37 PM ⢠May 12, 2025
594 Likes 32 Retweets
79 Replies
About me
đ° Iâm Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. Iâve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.
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