Good morning. QQQs -10bps, BTC +1% to $95k, China flat. Yields are up 2-4 bps across the curve.
Relatively quiet morning as we are in for the biggest week of TMT earnings with 40% of mkt cap reporting:
We’ll start with Macro, then move onto Tech Research/News/Third party Releases
Let’s get to it…
MACRO:
Some early remarks from Bessent interview with Fox this morning…
BESSENT SAYS IT IS A COMPLICATED RELATIONSHIP WITH CHINA
BESSENT SAYS FIRST TRADE DEAL MIGHT COME AS EARLY AS THIS WEEK OR NEXT WEEK
BESSENT SAYS WE WILL SEE WHAT HAPPENS WITH CHINA WHEN ASKED IF HE PLANNED TO CALL HIS COUNTERPART
BESSENT SAYS MOVING VERY QUICKLY WITH 15-18 TRADING PARTNERS
BESSENT SAYS NOT WORRIED ABOUT EMPTY SHELVES
BESSENT SAYS CHINESE EXEMPTIONS SHOW THEY WANT DE-ESCALATION ON TRADE
Walmart has notified Chinese suppliers to resume shipping goods - link
Cargo Shipments From China to U.S. Slide Toward a Standstill
WSJ:
The number of ships sailing from China to the U.S. laden with clothes, electronics, furniture and other goods is plunging, as an accelerating number of cargoes are canceled.
At the Port of Los Angeles, one of America’s biggest gateways for imports from China, executive director Gene Seroka told port officials Thursday that he expects a 35% drop in import volumes in two weeks “as essentially all shipments out of China for major retailers and manufacturers has ceased.”
The trade war between the U.S. and China has triggered retailers and manufacturers to switch their supply lines and rush products out of other parts of Asia, such as Vietnam and Malaysia. Companies are making hurried decisions about imports as they gear up for the peak shipping season this summer when retailers bring in supplies for the new school year and the fall and winter holidays.
Trump China Tariffs Set to Unleash Supply Jolt on US Economy
Since the US raised levies on China to 145% in early April, cargo shipments have plummeted, perhaps by as much as 60%, according to one estimate. That drastic reduction in goods from one of the largest US trading partners hasn’t been felt by many Americans yet, but that’s about to change.
By the middle of May, thousands of companies — big and small — will be needing to replenish inventories. Giant retailers such as Walmart Inc. and Target Corp. told Trump in a meeting last week that shoppers are likely to see empty shelves and higher prices. Torsten Slok, Apollo Management’s chief economist, recently warned of looming “Covid-like” shortages and significant layoffs in industries spanning trucking, logistics and retail.
Shein Hikes US Prices as Much as 377% Ahead of Tariff Increases
Most of the hikes in US prices came on Friday, with markups significantly higher in some categories than others, according to data compiled by Bloomberg News. The average price for the top 100 products in the beauty and health category increased by 51% from Thursday, with several of the items more than doubling in price. For home and kitchen products and toys, the average jump was more than 30%, led by a massive 377% increase in the price of a 10-piece set of kitchen towels. For women’s clothing the rise was 8%.
RESEARCH/NEWS
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