TACO Season’s Over. Time for TUNA?
Volume 138 - The Week Ahead
TACO = Trump Always Chickens Out
TUNA = Trump Unleashes Nonsensical Announcements
Another orderly week to trade. What should have been a 4-day week turned into a 3-day week for me as it was my son's first birthday on Friday (how fast time goes)... SPX was up 1.9% on the week and the Nasdaq 2.1%. The question for this week is: after that news reporter kindly pointed out how Trump always chickens out the other day... do we now get TUNA?
SPX May performance was the best May since 1990 (up 6.08%) - "sell in May and go away" didn't get the memo. Tariffs, rate fears, and AI fatigue? All dismissed. We're definitely in for some turbulence up here as markets feel a bit fatigued before making their mind up on direction.
The 5800/5900 risk reversal that expired Friday worked out nicely. Shared it at -1, trimmed 75% at 46.5, and let the rest ride to expiration. Not a bad way to end the month.
NVIDIA’s Q1 print held up well in the face of known China-related headwinds, with revenue landing at $44.1B and guidance for Q2 slightly ahead of buyside expectations at $45B. Gross margins came in at 61% versus the prior 71% outlook, which was largely the result of H20-related write-downs, but the core story was intact. Blackwell momentum picked up meaningfully, generating $24B in sales, and hyperscaler demand remains strong, with rack deployments ramping fast. Management continues to target a return to mid-70s margins by year-end, pointing to efficiency gains and broader demand across global AI infrastructure. Ex-China, this quarter was solid.