Stocks rallied again yesterday, though they gave up some momentum into the close. The S&P 500 is now up 14% from its April 9 low – thought still down almost 4% on the year. Most markets are relatively calm today as investors nervously eye US-China trade talks this weekend. Gold and crude oil are up modestly, though, while Bitcoin is adding to yesterday’s solid rally.
While sentiment has remained lousy, enough buyers have stepped up to the plate to fuel a solid, month-long rally. Even President Trump got into the act, saying after yesterday’s US-UK trade deal ceremony that, “This country will hit a point that you better go out and buy stock.”
SPX, GOOGL, AAPL (YTD % Change)
Data by YCharts
That said, reports on this weekend’s US-China trade talks in Switzerland are all over the map. Bloomberg reported that the Trump Administration might cut the 145% tariff rate on Chinese goods to less than 60%. This morning, Trump himself just posted on Truth Social that he thinks an 80% rate “seems right.” Meanwhile, April trade data out of China showed exports to the US plunging 21% year-over-year. That followed a 9.1% rise in March.
Finally, analysts came to Alphabet Inc.’s (GOOGL) defense yesterday after the stock tanked on search news out of Apple Inc. (AAPL). During court testimony on Wednesday, an Apple executive said his firm was likely going to revamp the Safari web browser, making it more reliant on Artificial Intelligence (AI) search engines.
Google is currently the default search tool in Apple’s browser – paying $20 billion to AAPL per year for that privilege. Its shares dropped 7% on the news, before rising modestly yesterday as analysts called the selloff “overdone.” How the GOOGL-AAPL relationship sorts out is anyone’s guess. But analysts DO increasingly think AI-driven search tools will supplant traditional search engines over time. Firms like Alphabet will need to adapt to keep gobs of advertising revenue coming in the door.
