This Week in Barrons: 5.18.2025

In partnership with

• “We’re in an innovation super-cycle … and these cycles don’t come around very often.  We can’t afford to be leashed by regulations.” … Accel’s Sonali De Rycker.

• Effort vs Value:  We expend effort.  We create value.  Per Seth Godin: “It’s easy to get confused about which one we’re going to ultimately be compensated for.”

• The stock market’s V-shaped recovery is the fastest in 40 years … [FYI: From: ‘The sky is falling’ to ‘Never mind’ – it’s just the New Normal.]

• Baby Bonds … really?  A $4T tax bill was revealed this week, and within it is a unique proposal where our government seeds accounts with $1,000 for each American baby born in the coming years.  The funds can go toward school, training programs, small business loans, or first-time home purchases.  Families can contribute up to $5,000/yr.  They’re called ‘Baby Bonds’ and/or ‘MAGA Accounts’ == ‘Money Account for Growth and Advancement.’  Sen. Ted Cruz described them as ‘a 401(k) for every newborn in America’.

• This week, the innards of trading & banking changed forever.  Ondo, Kinexys (JPM), and LINK all teamed-up … to successfully complete the first, cross-chain Delivery / Payment transaction on the Ondo Chain test net.  Ondo's tokenized Short-Term, U.S. Treasuries Fund (OUSG), traded hands with payments settled via Kinexys’ (JPM) private blockchain – all glued together by Chainlink’s cross-chain orchestration technology.  TradFi-meet-DeFi.  The trade Occurred in Real-Time, was Instant & Simultaneous, had zero Counterparty Headaches & fewer Intermediaries to skim Profits.  The trade came complete with: True Transparency.  This could change Banking and Trading as we know it.  No more Dark Pools or Naked PUTs.  "TradFi and DeFi convergence isn’t just hype anymore.  Institutions like J.P. Morgan see a real market in public chains, and they're finally stepping up."  This could bring back trust and eliminate large fee-structures – with one stroke of the pen.  Considering, Kinexys already pushes $2B daily, hitting $1.5T since launch – there’s reason to be truly optimistic.

• In 1946, Harvard Law School bought … a $27 copy of the Magna Carta.  On Thursday, they found out that it is an incredibly rare official version of the legal agreement issued in 1300 by King Edward I – worth over $30m.  [FYI: Even Harvard makes mistakes.]

• Tariff receipts hit a record $16B in April … 86% higher than in March.

• Trump invoked our "Most Favored Nation" policy … allowing Americans to pay no more for prescription drugs than any other country.  Patients will move away from insurers and pharmacy-benefit managers – toward other cash-pay options.

• The U.S. Dept. of Education ended a 5-year pause … and resumed collections on 5.3m borrowers in student-loan default.

• Perplexity is finalizing their next funding round … and is eyeing a full-frontal assault on Google (complete with new browser) and growing traction in the AI-powered search arena with Apple.

• Nvidia surged after announcing a new partnership … with Saudi Arabia’s Public Investment Fund.  They are delivering 18,000 of their most advanced AI chips as part of a plan to turn the Saudi kingdom into a global AI hub.

• First Solar shares jumped … after a draft GOP tax plan was less harsh on renewable incentives than expected.

• U.S. new vehicle prices increased in April … more than in the last 5 years.

• Bezos-backed Slate Auto received 100k reservations in 2 weeks … on the promise of a no-frills truck, with a price tag of under $20,000 (w/ Fed EV credit).  [FYI: Tesla’s Cybertruck proved that Reservations are NOT Purchases.]

• Honda and Nissan are expecting high tariffs … due to the lack of any pre-negotiated settlement for their Japanese-made auto parts.

• Trump is pressuring Apple to move iPhone production to U.S. … even though India just dropped all tariffs on U.S. goods.

• Dick’s Sporting Goods made a $2.4B takeover offer … for Foot Locker.

• Due to lack of Sales, Tesla may close 1/3 of its stores … They may have to in order to keep from posting a Q2 LOSS.

• Walmart believes that the ‘Price is Wrong’ … and will be adjusting prices higher in late May & June due to tariffs. 

• Merger: Charter + Cox Communications … the first and eighth largest U.S. cable providers have a $35B deal.

• AAVE – a DeFi protocol known for borrowing and lending services … has reached all-time highs in active loans and total value locked,

• Crypto is seeing big gains … and that means people are ‘gonna-take-profits’ – especially after spending a long time in ‘please-stop-moving-lower-ville’.

• Coinbase:

  o Kicked off the week by landing its spot in the S&P 500 … and shares jumped nearly 25%.  Everyone was happy. 

  o Hackers broke into Coinbase and grabbed … customer names, birth dates, and partial Social Security numbers.  The hackers wanted $20m, and instead CEO Brian Armstrong put a $20m bounty on their heads.  

  o Coinbase’s stock remained UP 22% on the month.

• Crypto IPOs & pseudo-IPOs for 2025:

  o 21 Capital … is a Tether + Bitfinex + SoftBank + Cantor-Fitzgerald love child.  It’s already being traded under CEP, but their new ticker is: XXI. 

  o Circle … The issuer of the USDC stablecoin filed for an June IPO targeting a $4-$5B valuation. 

  o American Bitcoin … Eric Trump’s BTC mining company, is targeting Q3 for their IPO.

  o Kraken … is IPO’ing.  It’s the oldest U.S. crypto exchange, and one of the oldest continually operating crypto exchanges in the world. 

  o Anchorage Digital … is the first Federally chartered Crypto Bank. 

  o Bullish … owns CoinDesk, and is back to IPO after their failed SPAC attempt in 2021. 

  o Animoca Brands … is a gaming beast in crypto – looking to IPO in either the U.S. or Hong Kong. 

  Telegram … will IPO on the NASDAQ.

• Wednesday:  Our FED (as expected) announced no changes to Monday:  Okay, so this weekend we learned that the first meeting with the Chinese went well, and expectations are high on both sides.  The details thus far are:

  1. The U.S. and China agree to major reductions in tariffs for 90 days.

  2. The U.S. will lower tariffs on Chinese goods to 30% from 145%.

  3. China will cut tariffs on U.S. goods to 10% from 125%.

  The details are not hammered out (as of yet), but all we needed to see was progress.  The weekend also brought us a cease fire between India and Pakistan, and peace talks moving forward in Ukraine.  It was a good weekend for market positive news.

• Wednesday:  U.S. stocks were mixed on Wednesday as positive momentum from a U.S. / China trade deal faded after two strong days of stocks gains.  A number of U.S. chip stocks and technology firms announced AI deals in the Middle East.  President Trump secured $600B in commitments from Saudi Arabia to U.S. companies during his tour of the Gulf states.  The Mag7 tech stocks did the heavy lifting on Wednesday with strong gains from TSLA, NVDA, and GOOGL.

• Friday:  President Trump said that the U.S. will re-set tariff rates for its trading partners within the next few weeks.  He explained that we cannot negotiate trade deals with all countries at once due to limited capacity.  Today will be a higher volume day than normal – due to it being monthly option expiration.  Goldman Sachs estimates that over $2.8T of notional options exposure will expire today, including $1.2T of SPX options, and $580B of notional, single stock options.  Today will be the largest May options expiration on record.

• Bitcoin & Crypto are assaulting Wall Street: (on Tuesday of this past week)

  1. Coinbase joined the S&P 500.

  2. DeFi Technologies (DEFT) started trading on the Nasdaq.

  3. Strategy and MetaPlanet purchased another 13,390 and 1,241 Bitcoin respectively.

  4. And the American Bitcoin Mining Co. announced that they are doing a Reverse Take-Over (pseudo-SPAC) with Gryphon Digital Mining, Inc.

  This is just how quickly the traditional finance world is embracing digital assets.  It’s actually less about Wall Street being disrupted, and more about Bitcoin and Crypto growing into their acceptance.  Wall Street banks make money on SPACs.  Wall Street hedge funds make money every time Strategy buys more bitcoin.  And Wall Street asset and index fund managers make money when companies like Coinbase join the S&P.

• The Market’s 2-Sigma POP … and NVIDIA’s dangerous Gamma Squeeze higher were not natural.  On the S&Ps (SPX), we moved $300 last week, when we were expecting to move $130.  This upside volatility was the result of retail call buying that forced market makers to buy stock, and created a vicious upward cycle that could violently unwind this coming week. 

• We’ve formed a Volatility Trap … While buyers were celebrating, few noticed that volatility has refused to drop below 17.5.  We just experienced a 2-Sigma move to the upside, BUT the VIX is still hanging around 20.  That is a trading signal that is causing the Smart Money to hedge-their-bets against disaster.  TIP #1: If we rally early next week – buy a CALL SPREAD on the VIX.

• Bond (/ZB) Market Breakdown … On a 15-year chart, bonds are stuck in the mud and they feel like they want to move lower.  Moody’s has already downgraded the U.S. credit rating due to: increasing debt load, anticipated worsening fiscal outlook; coupled with political risk and policy uncertainty.  TIP #2: If Treasury Bonds break below 112, rates move higher == BUY S&P PUTS. 

• Tech Frenzy 2.0 is a Warning Sign …  when worthless companies like SuperMicro (SMCI – with multiple fraud accusations) suddenly start surging – it’s time to become defensive.  Tip #3: When the S&Ps move 2 Standard Deviations, it’s time to TAKE PROFITS!

• The U.S. Dollar … remains bearish despite this short-term rebound.  After all, we still have: expensive valuations, timing issues, and political risk & policy uncertainty.

• SPX Expected Move (EM):

  o Last Week’s EM = $130 and we moved ~$300 (over a 2-sigma move).

  o Next Week’s EM = $92.  This must be a mis-print because after a 300-point explosion this week, a mere $92 EM is pure delusion, and will crush unprepared traders.

• The rally continues, but so do the rumblings of a recession.  Bullish price actions show us the point at which everyone got caught offside.  Risk management is key in the face of lower fundamentals, rising downside risks, and higher asset valuations.

  5 Things to Watch … Callum Thomas:

  - Bank delinquencies are rising, and so are their lending standards.

  - Tariffs = Higher Prices == Consumer & Investor pessimism.

  - Tax cuts won’t do anything for an extremely difficult FISCAL outlook.

  - Foreign money-flows into U.S. assets have dried up.

  - The rebound in stocks only made their valuations richer.

  -  TIP #4: Buy more Bitcoin (IBIT) and Gold.

• HODL’s: (Hold-On for Dear Life)

  - (+) PUBLIC.com Bond Portfolio (7.74% yield) / TLT (10-year T-Bills)

  -  (+) IBIT – Blackrock’s Spot Bitcoin ETF ($58.7 / in at $24)

  - (+) Physical Commodities = Gold @ $3205/oz. & Silver @ $32.4/oz.

  - Bitcoin (BTC = $104,700 / in at $4,310)

  - Ethereum (ETH = 2,540 / in at $310)

  - (+) GLD – Gold ETF ($297.7 / in at $212)

• Options for Income:  De-Risking a Portfolio… (using IBIT for example)

  - BUY-n-HOLD the IBIT ETF

  - BUY PUTs: 1 Std. Dev. Lower, Expiring = 3-weeks away, OTM (out-of-the-money) for protection.

  - SELL Covered CALLs: 0.75 to 1 Std. Dev. Higher, Expiring = 2-weeks away, OTM for income and to finance the PUTs.

• ‘De-Gen’ Economy:

  - Singapore (SE = $161 / in at $107)

   

  Please be safe out there!

_{Expressed thoughts offered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. Culbertson, contributing sources and those he interviews.  You can subscribe by visiting: https://rfsfinanicalnews.beehiiv.com/subscribe.}

_{Please write to Mr. Culbertson at: <[email protected]> to inform him of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference <http://rfcfinancialnews.blogspot.com/> and/or https://rfsfinanicalnews.beehiiv.com}

If you'd like to see R.F. in action - please feel free to view the TED talk that he gave on Fearless Investing.

Creativity = https://youtu.be/n2QiPSe_dKk 

Sales = https://youtu.be/blKw0zb6SZk

Startup Incinerator = https://youtu.be/ieR6vzCFldI

To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

To Subscribe: https://rfsfinanicalnews.beehiiv.com/subscribe

Remember the Blog: <http://rfcfinancialnews.blogspot.com/>  and/or
https://rfsfinanicalnews.beehiiv.com.

Until next week – be safe.

R.F. Culbertson

<mailto:[email protected]>

http://rfcfinancialnews.blogspot.com

https://rfsfinanicalnews.beehiiv.com