Finally/Wynn takes a CapEx pause/Other notable stuff

Finally some high level talks with China are about to take place but we of course have little idea of what a deal would look like, the timing of such and where tariff rates eventually settle out at because they are not going back to zero. I continue to talk about the existential impact to many small businesses of this trade war because of the economic threat they are under, the implications for the broader economy and the unnecessary sacrifice they are having to make.

We were reminded of this again yesterday when the CEO of Williams K. Walthers appeared on CNBC yesterday talking about the challenges her business faces, one that was founded in 1932 in the depths of the Great Depression, due to their manufacturing sourcing from China because as she claims, they are good at what they do. They make model trains and accessories. Not quite a national security threat.

https://www.cnbc.com/video/2025/05/06/williams-k-walthers-ceo-tariff-impact-has-been-significant.html

Ahead of the Fed meeting, the PBOC cut its 7 day reverse repo rate by 10 bps to 1.40%. This is their benchmark rate and also trimmed the reserve requirement ratio by 50 bps to 6.2%. They estimate this RRR cut will result in an extra 1 trillion yuan (about $138b) of fresh liquidity.

With regards to the Federal Reserve and what we'll hear from Jay Powell, he's as clueless as the rest of us on how this all plays out. Yes, I believe we're headed towards some rate cuts but maybe tweaks rather than anything deeper for now and there is no chance he commits to anything today or until he gets more information from the administration on what the global tariff landscape looks like so they can plug in all the numbers into their econometric models.

I continue to find it really helpful to hear directly from companies about what they are seeing on the economic ground and there is no better way than to dig into as many conference calls as I can, both for stocks we own and others in order to merge the macro with the micro.