Hi YXI friends,

The US GDP contracted by 0.3% (real, annualised) in Q1, led by falling net exports (i.e. importing more than exporting) and personal consumption. However, this was much better than what Atlanta Fed’s GDPNow model had been forecasting since February, which was -2.5%.

PCE readings were also very much benign, showing inflation moving towards the Fed’s 2% target.

The problem with both sets of data is they are measuring the economy of one whole month ago, before the Liberation Day. Since the beginning of April, the world has become a much more uncertain place under the new tariff proposals. Like Trump himself admitted on Truth Social - we are at a large degree still looking at a Biden economy / market today. The full impact of Trump policies are yet to fully ripple across.

For those looking for Model Signals directly, you can find them in our dedicated morning note on TSLA (free), AAPL, BTC, and TLT. We also show them in the main content below.

Let’s dive in!

Table of Contents

• 1. YXI Daily Dashboard

  • Observations from today

  • SPY and QQQ Charts

• 2. Rates & TLT

• 3. Bitcoin (BTC)

• 4. Magnificent 7 Stocks

  • Apple

  • Amazon

  • Alphabet

  • Meta

  • Microsoft

  • Nvidia

  • Tesla

• 5. Trade Updates & Monitoring

• 6. Notable ETF Flows From Previous Day

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

1. YXI Daily Dashboard

Observations from today

1. The initial estimate of Q1 real GDP growth released by the US Bureau of Economic Analysis was -0.3%, way above the final GDPNow estimate of -2.7% growth.

2. GDPNow Q2 GDP estimate is now 2.4%, which is expansionary.

3. Oil (USO) retreated again yesterday, down 3.5%, nearing a 2-standard-deviation move.

4. META and MSFT both rose after earnings, showing renewed investor risk appetite.

SPY and QQQ Charts

The primary expectations are inked in black. The alternative expectations are inked in red.

SPY and QQQ Daily Quant Signals Are Coming Soon.

SPY (https://www.tradingview.com/x/lEa8Ia1G/)

While SPY has stalled at the resistance zone, the overall posture of the market remains risk on. There is simply a lot of supply volume to absorb in the green box as SPY moves towards the 200 day EMA.

SPY May Seasonality

May is a seasonally bullish month for SPY.

QQQ (https://www.tradingview.com/x/36z86TDO/)

QQQ managed a strong closed yesterday, despite the initial dip. It needs to absorb the volume supply built in March before challenging the 200 EMA. The risk remains on the upside.

QQQ Seasonality

May is a bullish month for QQQ, but the big gains typically happen in the final week.

2. Rates & TLT

Headline and Core PCE

Both the Headline and Core PCE were flat MoM, now moving down towards the Fed target on a YoY basis.

There are two things of note. The Fed’s official inflation target is 2% for the Headline PCE. While Core PCE is an important barometer of price stability, it is not directly targeted.

Secondly, the latest FOMC has projected the expected Headline and Core PCE for the year end to be 2.7% / 2.8%. If the realised PCE trajectory significantly undershoots this, the Fed will have a lot more room for cutting.

FOMC Projections

We use the Fed Funds futures market to understand the market expectations of future FOMC interest rate decisions.

The rates market project the Fed to cut 4 times by the 2025 year end, with an additional cut in H1 2026.

3-month SOFR Futures Yields

YXI TLT Model Strategy Signal

For greater explanations on how the model strategies work, please see my separate morning note dedicated to the Daily Model Signals (TSLA signals are free).

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