Hard Landing/Soft Landing Scoreboard: May Update

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What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard: Hard Data Still (Mostly) Hanging in There
  • ISM Manufacturing Index Takeaways

Futures sold off overnight as a notably weak Chinese factory report offset a favorably cooler-than-anticipated EU CPI print.

China’s May Manufacturing PMI fell to 48.3 vs. (E) 50.7 while EU Core CPI encouragingly fell from 2.7% to 2.3% vs. (E) 2.5% last month.

Looking ahead to today’s session, there are a few noteworthy economic reports including Motor Vehicle Sales (E: 16.4M), Factory Orders (E: -3.0%),  and JOLTS (E: 7.1 million). The market could be particularly sensitive to a soft Job Openings print as a drop below 7 million could stoke worries about the health of the labor market ahead of Friday’s May jobs report.

Additionally, there are a handful of Fed speakers but unless any of them deviate from the “wait-and-see” narrative of late, their market impact should be limited. Speakers today include Goolsbee (12:45 p.m. ET), Cook (1:00 p.m. ET), and Logan (3:30 p.m. ET).

Finally, some late season earnings continue to trickle in with DG ($1.47), NIO ($-0.22), CRWD ($-0.28), and HPE ($0.28) all reporting Q1 results today.

With the ISM Services (tomorrow) and BLS jobs report (Friday) still looming large, today should be a relatively quiet day for markets as traders digest the big May rally however risks of profit taking exist if a negative headline crosses the wires.

Tariff/Trade-War Update

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What’s in Today’s Report:

  • Where Do We Stand With Tariffs and How Important Are They for Markets?
  • Weekly Economic Preview: ISM Data and May Jobs Report in Focus

Futures are lower with global markets amid a combination of escalating trade war tensions and an unexpected intensification in the Russia-Ukraine war over the weekend.

President Trump doubled tariffs on steel to 50% which dampens hopes for an EU trade deal while rhetoric between the U.S. and China deteriorated since Friday’s close.

Ukraine surprisingly struck Russian air base targets over the weekend in what military officials said was their large drone attack so far in the multi-year conflict. The escalating geopolitical tensions has reignited a fear bid in oil with futures prices up nearly 4% this morning.

Today kicks off a busy week of economic data with the most important release coming just after the open via the ISM Manufacturing PMI (E: 48.5). Construction Spending (E: 0.2%) will also be released after the open but is less likely to impact markets.

There are also multiple noteworthy Fed officials scheduled to speak today including, Logan (10:15 a.m. ET), Goolsbee (12:45 p.m. ET), and most importantly Powell (1:00 p.m. ET). Any fresh insight on policy plans has the potential to materially move markets (hawkish commentary would influence risk-aversion while dovish comments would support a continuation of the May rally).

‘TACO Trade’: What to know about the term Donald Trump doesn’t want to hear again

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The term “TACO trade” took off across most media platforms on Wednesday, and if you are just now catching up and wondering what that’s all about … well, it doesn’t have a thing to do with Taco Bell.

It does have everything to do with President Donald Trump and his on-again, off-again tariff policies. And Trump is not too happy to hear it.

“But the Trump tariff dip,” Tom Essaye of the Sevens Report said. “Essentially, Trump has proven to investors that he won’t actually follow through with draconian tariffs. As such, any sell-off following a dramatic tariff threat should be bought.”

Trump was asked about the term on Wednesday, and he claimed it was the first time he had heard of it. He also, clearly, did not appreciate it.
To read the full article from Penn Live from May 29, 2025 click here.

TACO Trump goes viral, as analyst confirms the US President does ‘chicken out’

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It didn’t take long for social media to jump on to US President Donald Trump’s latest, unedifying nickname.

Earlier this month, Financial Times columnist Robert Armstrong coined an acronym to describe a popular trading strategy centered around Trump’s start-and-stop tariff policies – TACO (Trump Always Chickens Out).

So does Trump always chicken out?

According to a note to subscribers on Thursday from respected Wall Street market analyst Tom Essaye, the answer is yes.

In the note, the Sevens Report Research founder pointed to Trump’s decision to exempt goods subject to the US-Mexico-Canada Agreement from additional tariffs on Mexico and Canada, significantly reducing their sting. To read the full article on The New Daily from May 29, 2025 click here.

Get access to the full Sevens Report issue on this topic—plus two weeks of free, no-obligation market insights built for advisors. 📩 Start your trial here: click here.

Advisors at top firms like Morgan Stanley, Merrill, Wells Fargo, and Raymond James already subscribe. Ready to see why?
👉 Start your quarterly subscription here: click here.

Trump pushes back on characterization of ‘TACO’ strategy: ‘It’s called negotiation’

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President Donald Trump pushed back on Wednesday on the characterization of his tariff policy as “chickening out” after he announced and then paused tariffs on other countries multiple times.

Trump objected to the description when asked by a reporter, saying it was part of his wider strategy.

Announcements of trade deals, tariff deadline extensions, and the lowering of tariffs all helped contribute to a market revival after an initial crash. The market has now regained most of its value, partially due to the TACO strategy.

“So, the returns are somewhat conclusive: The TACO trade has worked and buying stocks on extreme tariff-related threats has worked,” Tom Essaye, founder of Sevens Report Research, said, according to Market Watch. To read the full piece on Washington Examiner, from May 28, 2025, click here.

Get access to the full Sevens Report issue on this topic—plus two weeks of free, no-obligation market insights built for advisors. 📩 Start your trial here: click here.

Advisors at top firms like Morgan Stanley, Merrill, Wells Fargo, and Raymond James already subscribe. Ready to see why?
👉 Start your quarterly subscription here: click here.

 

Why the ’TACO Trade’ still matters for your portfolio

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Investing.com — Over the past 48 hours, the term ‘TACO Trade’ has been widely circulated on social media and even made it to the White House. TACO is an acronym for “Trump Always Chickens Out”, which suggests that despite his tough talk on tariffs, he will always back down in the end.

Trump was asked about the TACO trade on Wednesday, enraging the President. “… don’t ever say – what you said, that’s a nasty question,” Trump slapped back when asked about it.

The TACO trade is the new Trump trade. Here’s what to know about the meme ruling the stock market.

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  • A new acronym is making its rounds on Wall Street: TACO
  • “Trump Always Chickens Out” refers to markets betting on Trump walking back tariff proposals.
  • Trump called the TACO moniker “nasty” when asked about it on Wednesday.

With TACO, investors have a new guiding principle.

“Buy the Trump tariff dip. Essentially, Trump has proven to investors that he won’t actually follow through with draconian tariffs,” Tom Essaye of the Sevens Report wrote on Wednesday. “As such, any sell-off following a dramatic tariff threat should be bought.”

Retail investors have adopted the strategy, with dip-buying at historic levels recently. But how long the TACO trade will remain effective depends on what happens after the tariff delays unwind over the summer.

Click here to view the full article in MSN.com from May 29, 2025.

Get access to the full Sevens Report issue on this topic—plus two weeks of free, no-obligation market insights built for advisors. 📩 Start your trial here: click here.

Advisors at top firms like Morgan Stanley, Merrill, Wells Fargo, and Raymond James already subscribe. Ready to see why?
👉 Start your quarterly subscription here: click here.

Assessing Market Performance from the April Lows

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What’s in Today’s Report:

  • Assessing Market Performance from the April Lows

Futures are slightly lower following a night of mixed earnings and economic data.

Earnings after the bell were decidedly mixed with some positives (MCHP, DELL) being offset by negative results (NTAP, GAP) and earnings are slightly weighing on futures.

Economically, Italian CPI beat estimates (1.9% vs. (E) 2.0%), further increasing expectations for a rate cut.

Today focus will be on the Core PCE Price Index (E: 0.1% m/m, 2.6% y/y) and a weaker than expected number will be positive for stocks and bonds as it would push back on inflation concerns and make a Fed rate cut later this year slightly more likely.

The other notable events today include two more economic reports, Consumer Sentiment (E: 52.0) and the Chicago PMI (E: 45.0) and a few Fed speakers: Bostic (12:20 p.m. ET), Daly (4:45 p.m. ET).

Trump Branded With Embarrassing Nickname Over Tariff Confusion

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Wall Street is beginning to understand the president’s roller-coaster foreign trade decisions with the help of a trendy acronym: TACO—or “Trump Always Chickens Out.”

The TACO theory was coined earlier this month by Financial Times columnist Robert Armstrong, adding a catchy name to the practice of loading up on stocks when Donald Trump first announces the tariffs and then selling when he ultimately backtracks on enforcing them.

In a Wednesday note obtained by Market Watch, Sevens Report Research founder Tom Essaye insisted that Trump does, in fact, always chicken out. So far, that’s been true for enacting additional tariffs on Mexico and Canada, postponing his “reciprocal” tariff plan on dozens of countries after his “Liberation Day” announcement went south, delaying a tariff on imports from the European Union, and smashing his plan to fine China, temporarily decreasing tariffs on Chinese products to 30 percent from 145 percent. Click here to view the full article in The New Republic on May 28, 2025.

Get access to the full Sevens Report issue on this topic—plus two weeks of free, no-obligation market insights built for advisors. 📩 Start your trial here: click here.

Advisors at top firms like Morgan Stanley, Merrill, Wells Fargo, and Raymond James already subscribe. Ready to see why?
👉 Start your quarterly subscription here: click here.

Initial Thoughts on Tariff Suspension (Bullish, but not an All Clear)

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What’s in Today’s Report:

  • Initial Thoughts on Tariff Suspension (Bullish, but not an All Clear)
  • Credit Spreads Deterioration:  An Economic Warning?

Futures are sharply higher after the Court of International Trade invalidated the administration’s reciprocal tariffs.

The ruling means that most of the 2025 tariffs, including all the reciprocal tariffs and additional tariffs on China, Mexico and China, are suspended immediately.

Clearly trade headlines will dominate the news wires today in the wake of last night’s court decision, anything that is positive for tariffs will be negative for stocks and vice-versa.

Away from trade, there are several notable economic reports today including Jobless Claims (E: 230K), Revised Q1 GDP (E: -0.3%) and Pending Home Sales (E: -1.1%).  Again, the stronger the data (especially for claims and Revised GDP) the better for markets.

On the Fed front, there are a few speakers today and their commentary in the wake of tariff suspension will be notable (anything that implies sooner than expected rate cuts will be bullish).  Speakers today include Barkin (8:30 a.m. ET), Goolsbee (10:40 a.m. ET), Kugler (2:00 p.m. ET) and Daly (4:00 p.m. ET).

Finally, earnings remain important and names to watch today include COST ($4.25), DELL ($1.50) and MRVL ($0.44).