DIYWallST Weekly Recap & Market Forecast $SPX (May 11th—> May 16th)
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👋 Hello DIY Investors!
Markets paused for breath this week after a stellar nine-day run. While bulls had plenty of reasons to stay optimistic—early signs of trade de-escalation, a steady Fed, and better-than-feared earnings reports—investors found themselves digesting a slew of global developments that added nuance to the rally. Let's dive into what drove this week’s market mood. ⚖️
🌐 Market Overview: Trade Talk Softens, but Momentum Stalls
Markets cooled this week, with the S&P 500, Dow, and Nasdaq all pulling back slightly after a strong April rebound:
📝 The first formal U.S. trade "deal" was announced, albeit modest, as President Trump outlined a framework with the United Kingdom. It kept the baseline 10% tariff intact but opened the door for sector-specific exemptions.
📉 U.S.-China trade tensions eased slightly. Trump floated the idea of lowering the 145% tariff rate ahead of high-level weekend talks in Geneva.
💬 The Administration doubled down on the idea that multiple trade deals are in progress—with some trading partners expected to accept higher tariff baselines than the UK.
On the central bank front:
🇺🇸 The Fed held rates steady, citing uncertainty around both inflation and unemployment.
🇨🇳 PBOC cut rates, reinforcing the global pivot to easier monetary policy.
🗣️ Powell struck a cautious tone, suggesting it's too soon to know which risk—growth or inflation—will dominate.
💬 President Trump, in contrast, continued to call for immediate rate cuts, adding fuel to Fed independence concerns.
In markets:
🛢️ Oil rallied, despite OPEC+ agreeing to increase production by 400K barrels/day in June—suggesting the move was already priced in.
🪙 Bitcoin retook $100K, and the Dollar Index pushed back above 100.
📉 The 10-year Treasury yield moved up to a two-week high after the Fed decision.
📈 Weekly Market Performance:
S&P 500: -0.5%
Dow Jones: -0.2%
Nasdaq: -0.3%
The S&P ended the week at 5,700, fully retracing the losses from April's tariff shock and now trading at 21x FY25 earnings, even as earnings estimates trend lower.
📊 Key Economic & Market Drivers
First Trade Framework: UK pact keeps baseline tariffs, but signals a more measured approach going forward.
Fed Caution, Not Cuts: Risks from trade policy cited, but Powell remains patient.
Global Rate Cuts: Dovish pivots from BoJ and PBOC add to easing sentiment.
Energy & Currency Moves: Oil strength, Bitcoin resurgence, and a firmer dollar reflect a cautiously risk-on tone.
💼 Earnings Recap: Tariffs Creep Into the Outlook
Q1 earnings season rolled into its busiest stretch, and tariffs were top of mind across sectors:
🚘 Autos & Industrials
Ford ($F): Big Q1 beat, likely boosted by pre-tariff consumer buying. But the company withdrew guidance, warning tariffs could persist for 3+ years.
Cummins ($CMI): Strong results, but also pulled guidance, citing a “challenging tariff-driven environment.”
Carvana ($CVNA): Record results, and sees tariffs as a net positive—used cars will rise in price, but less than new ones.
🧴 Consumer Goods & Retail
Clorox ($CLX): Missed expectations, citing trade-induced disruptions. But consumers haven’t yet traded down to private labels.
Sketchers ($SKX): Agreed to be acquired by 3G Capital for $9.5B, as M&A heats up amid macro uncertainty.
🎬 Media & Entertainment
Disney ($DIS): Beat and raised guidance. Streaming and parks did well. Management stayed tight-lipped on the proposed 100% film tariffs.
🖥️ Semis & Tech
Nvidia ($NVDA): Continued to rebound on reports that the Trump Admin may ease chip export rules outside China—a potential reversal of Biden-era restrictions.
🔮 Looking Ahead: Key Themes to Watch
With earnings season in its final stretch and geopolitics heating up again, next week offers another critical checkpoint for macro and market momentum.
🗓️ Top Events on the Radar:
🇺🇸 U.S.-China Trade Talks: Can Geneva de-escalate tensions?
🎤 Powell Speech: Markets will parse every word for rate cut clues.
📈 Inflation & Retail Sales Data: Will prices stay tame and consumers stay resilient?
📊 Key Earnings:
Walmart ($WMT), Alibaba ($BABA), Cisco ($CSCO), CoreWeave ($CRWV)
📌 Stay Focused, Stay Flexible
This market is learning to trade uncertainty, not just fundamentals. Whether it’s tariffs, Fed independence, or consumer resilience, volatility is the name of the game.
📊 Want real-time insights and trade ideas? Check out our Trading Corner for earnings recaps, event timelines, and market snapshots.
Weekly Poll:
Will Powell hint at summer rate cuts next week—or hold the line amid White House pressure? Drop your thoughts in Discord or reply directly to this email. 💬
Let’s keep learning, growing, and investing smarter—together.
📝 From the Editor
Fed Chair Powell – May 7 Recap
Rates held steady at 4.5%, as expected.
Labor market remains strong, economy still holding up.
Inflation stays elevated, now with tariffs becoming a key inflation driver.
Powell emphasized “unusually high uncertainty”, and the Fed is in no rush to shift policy.
Risks of higher inflation and rising unemployment are increasing — but not yet showing up in hard data.
The Fed is ready to act if things worsen quickly, but prefers to wait for clarity.
Powell clearly distanced the Fed from political and fiscal decisions, pointing out that the debt path is Congress’s problem.
Trade policy — especially with China — is now a major wildcard.
– The DIYWallSt Team
Market Forecast (Updated 5/11/2025)
SPX - Market Implications from FOMC is now pricing in a longer pause or slower easing, depending on how the trade war unfolds. Economy is still strong according to data.
Next resistance: $5,785 and $5,880
Next support: $5,530, and $5,100
Weekly Sentiment: Oversold
Chart Analysis: TVC:DXY Chart Image by WallSt007
DXY - Fed is holding rates for longer while ECB and PBOC has cut rates and ease policy so our dollar should be seeing strength again.
Next resistance: $102.80
Next support: $97.40
Weekly Sentiment: Overbought
Put to call Ratio: 1.42—>1.79—> 1.05
Next FOMC date: 06/17/2025
Fear & Greed Index: 35—>43—>62 (Under 25 is extreme fear)
BTC: Bitcoin is starting to get overbought here at this zone and with the dollar pushing up again due to interest rate hold, we should see some weakness in btc soon.
Next Major Resistance: 108k
Next Support: 94k and 77k.
BTC Chart: BINANCE:BTCUSD Chart Image by WallSt007
Undervalued Stock Watchlist(updated 5/11/2025): Stocks on our radar due to their potential value include: X10: AGCO, ALB, BAC, BIPC, CADE, CBU, CPK, FCNCA, FFIN, FMBH, GOOG, GOOGL, GRC, IRM, KIM, NPO, NXRT, OBK, PB, PFS, PHG, RNST, UMBF, URI, WBS, WDC, WT
X20: EE, KNTK, OKE, PAA, LILA, WRD, G, HCKT, HSTM, KRYS, LNTH, MESO, OKE, PAGP
Undervalued Stock Picks
Alphabet Inc. (NASDAQ: GOOGL) is the parent company of Google and a global leader in digital advertising, search, cloud computing, and artificial intelligence. Headquartered in Mountain View, California, its core businesses include Google Search, YouTube, Android, Google Cloud, and emerging AI products. Alphabet also operates "Other Bets" like Waymo (self-driving technology) and Verily (life sciences).
Buy: $136
Sell: $146.50
Stoploss: $125.50
Krystal Biotech, Inc. (NASDAQ: KRYS) is a biotechnology company focused on developing and commercializing genetic medicines for rare diseases. Headquartered in Pittsburgh, Pennsylvania, the company uses its proprietary redosable gene therapy platform to treat dermatological and respiratory conditions. Its lead product, Vyjuvek, is approved for the treatment of dystrophic epidermolysis bullosa (DEB), a severe skin disorder.
Buy: $112
Sell: $123
Stoploss: $101
Nextracker Inc. (NASDAQ: NXT) is a U.S.-based company that provides solar tracking and software solutions for utility-scale solar power projects. Headquartered in Fremont, California, Nextracker’s technology optimizes solar panel orientation to maximize energy output throughout the day. The company serves solar developers and EPCs globally, helping increase efficiency and lower the cost of solar energy.
Buy: $45.90
Sell: $52.75
Stoploss: $39
Swing Trading watchlist: Get a detailed view here.
Key Economic & Earnings Events for This Week: We moved this section to our trading corner that’s updated daily. 007ofWallSt Trading Corner
Quick Financial Glossary:
Overbought Sentiment: Imagine a product getting too popular, too fast. This might hint that its popularity could soon fade.
Oversold Market: Think of it as a fantastic product being ignored by many. Chances are, it'll soon catch everyone's eye and gain value.
Support: Picture it as a safety net under a trapeze artist. It's a level where a stock tends to stop falling, based on past performance.
Resistance: Think of this as a ceiling in a room. It's a level that a stock struggles to exceed, based on its history.
SPX (S&P 500 Index): This is like the leaderboard of the American stock market, showing the performance of 500 large companies listed on stock exchanges in the United States. It's often used as a thermometer for the overall health of the US stock market and economy.
DXY (US Dollar Index): Imagine it as a scorecard that tells us how strong the US dollar is compared to a basket of other currencies. It's like a report card for the US dollar's value on the global stage.