The S&P 500 is up at least 1.5% for three days in a row. Historically we've seen this before times of strong performance. Higher 10 out of 10 times a year later and up 21.6% on average.

*Trump: China's Xi has called him – Time Magazine interview
*Trump: His administration in active talks with Chinese to strike a deal – Time Magazine interview
*Trump: I will set a fair price of tariffs for different countries
*Trump: Would consider it a victory if U.S. has 50% tariffs a year from now – Time
*Trump signals support for ban on congressional stock trading
*Trump says he wouldn't call Xi unless Xi called him first
*Chinese embassy: China, U.S. not having any talks on tariffs
*Chinese embassy: US should stop creating confusion

🚨ECB's President Lagarde: The ongoing escalation of trade tensions complicates the global inflation outlook.

🚨Spot gold extends fall, last down 2% at $3,282.5/oz [the rotation into bitcoin has started]

At open, Dow Jones down 0.12%, S&P 500 and Nasdaq edge up 0.1%; Intel tumbles 10%, Alphabet extends gains for fourth session to rise 3.7%

25% pharma tariffs would increase U.S. drug costs by $51 bln annually: report commissioned by industry's U.S. trade group [inflation ⬆️]

BTC $95k

PBOC Governor Pan: US tariff 'abuse' hurts global growth, stability. PBOC to keep yuan exchange rate basically stable. Will cut RRR, policy rate when needed.

🚨Uni of Michigan Index of Consumer Sentiment: "While this month’s deterioration was particularly strong for middle-income families, expectations worsened for vast swaths of the population across age, education, income, and political affiliation. Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead. Labor market expectations remained bleak"

Media mentions of "bear market" vs "bull market" since 2017.

China exempts some US imports from 125% tariffs, asks firms to identify critical goods for exemption, per notified businesses

Chinese Foreign Ministry adviser: President Trump misjudged China’s willingness to yield under economic pressure, leaving the US ill-prepared for the tariff standoff.

🚨VIX DROPS 4%, APPROACHING 25 AGAIN

S&P 500 short-term market breadth, basically the number of stocks trading above key moving averages, has improved a lot over the 5, 20, and 50-day averages. But the 200-day average is still weak (for now).

*Trump: We'll be reasonable on tariffs
*Trump: Think markets are adjusting to tariff policy

🚨Trump: Won't drop China tariffs unless they give us something. Opening up China would be a big win

🚨Trump: Another tariff pause is unlikely

🚨Tom Lee: Bitcoin could be one of the top-performing assets this year, potentially hitting $250K.

*Fed Survey respondents also cite foreign divestment from US assets, value of US dollar, as other new potential shocks.
*Fed Survey: Prices remain high relative to fundamentals even after April market turmoil.

*Fed Survey: Treasury markets continued to see orderly trading. Markets continued to function amid recent volatility.
*Fed Survey: Growing stablecoin sector remains subject to run risks.
*Fed: The banking system remained sound and resilient, but hedge fund leverage rose to historical highs, concentrated among the largest funds.

🚨Former Fed governor Warsh: Fed errors contributed to the great inflation. Believe in operational independence of Fed, but they need strong oversight and when they err deserve opprobrium.