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In Today’s Issue:

  • S&P 500 back above the 200 day moving average

  • Overview of Trump’s “Most Favored Nation” Drug‐Pricing Order

  • and more……..

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Identifying and Profiting From the Top Themes in the Market

5/22 2pm EST

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S&P 500 Back Above the 200 Day Moving Average

As expected, SPY closed above the 200 day moving average yesterday. This changes the complexion as the market is in a clear up trend and there are a number of market participants who use the 200 day as a trigger….

Not saying this is over by any means, I still think we have a number of twists and turns, but Greg sums it up perfectly…

Fink, Fraser See Opportunities in Volatility Despite Trade Truce

Some of the world’s top financial leaders are preparing for continued market volatility despite the US-China trade truce — but say the uncertainty is also creating new openings for investment.

www.bloomberg.com/news/articles/2025-05-13/fink-fraser-see-opportunities-in-volatility-despite-trade-truce

Good active management thrives, which is hard to find, most active managers are index huggers…..

❝

Franklin Templeton CEO Jenny Johnson highlighted how volatility creates openings for nimble investors. “Whenever there’s volatility, there’s a reset — and that’s when active management thrives,” she said.

As evidenced by….

Wall Street research continues to be mostly useless….

Today’s big event is CPI….

Consumer prices likely rebounded in April as higher tariffs began to bite

Consumer prices likely rebounded in April as the first bite to Americans’ pocketbooks started to hit, economists say.

www.marketwatch.com/story/consumer-prices-likely-rebounded-in-april-as-higher-tariffs-began-to-bite-2fbf34f8?mod=home_lead

The next big shoe to drop for bulls would be for the FOMC to start aggressively cutting rates, which they won’t do if they sniff inflation, so this could be an important number.

I continue to slowly add back into all of the top themes. Crypto related is a major one…

This is an example as COIN replaces and old line financial in the S&P 500…..

Coinbase’s stock pops as the crypto exchange will join the S&P 500 index next Monday

Coinbase shares rocket higher in the extended session after ending the regular trading day up 4%.

www.marketwatch.com/story/the-wait-is-over-coinbase-is-finally-joining-the-s-p-500-index-e004630b?mod=home_lead

Also trying to find under the radar crypto related companies, here are three possibilities, all high risk. I own CYFRF but would probably have the other two (very small size) if I wasn’t golfing all day yesterday….

Another high risk theme I like is quantum computing. RGTI had earnings last night and is trading down big pre market…..

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The start-up reported revenue of $1.5 million for the March quarter, down from $3.1 million a year ago and below the consensus forecast of $2.6 million among analysts tracked by FactSet. The figure represents a 35% decrease sequentially. Rigetti’s operating loss reached $21.6 million, wider than the $16.6 million loss recorded a year ago.

Management said the changes in revenue reflected the “lumpy” nature of milestone-based research and development and government contracts, which can vary between quarters. The company notched a handful of contracts this year, including a $5.5 million grant from the U.S. Air Force and three awards in the U.K.

-Barron’s

I asked GPT if it was a buy, sell, or hold based on this report….

Buy / Sell / Hold Recommendation

Hold.

  • Why not Sell? The post-earnings drop has priced in the revenue miss and extended burn; a funded runway and recurring government milestones warrant staying in for the long-run quantum upside.

  • Why not Buy? There’s no near-term inflection for commercial revenues. It remains a binary, R&D-milestone story—better suited for a satellite allocation in a high-beta quantum bucket, not a core position.

Bottom Line: RGTI is not broken, but it’s not yet “built.” Steer clear of adding new capital until you see consistent revenue growth or clear guidance on commercialization timelines.

Can’t wait for this…..

Apple to Unveil New AI Tool to Increase iPhone Battery Life

Apple Inc. is planning to use artificial intelligence technology to address a frequent source of customer frustration: the iPhone’s battery life.

www.bloomberg.com/news/articles/2025-05-12/apple-plans-ai-powered-battery-management-mode-for-devices-in-ios-19?srnd=homepage-americas

Overview of Trump’s “Most Favored Nation” Drug‐Pricing Order


On May 12, 2025, President Trump signed an executive order instructing HHS, the U.S. Trade Representative, Commerce and DOJ/FTC to pursue a “most favored nation” (MFN) policy—tying U.S. drug prices (across Medicare, Medicaid and the commercial market) to the lowest prices paid in other developed nations. The order demands that within 30 days HHS set price‐reduction targets with manufacturers; if unmet after six months, MFN pricing could be imposed by rulemaking or “other aggressive measures” AP News.

Short‐Term Impact

  • Market reaction: Pharma stocks initially dipped on headline risk, then mostly rebounded as investors judged enforcement unlikely without Congress’s backing Investor's Business Daily.

  • Uncertainty premium: With no drug list or country roster disclosed, near‐term volatility will persist—particularly around high‐expenditure classes like GLP-1s (e.g., Ozempic, Wegovy) and oncology drugs The Guardian.

Long‐Term Implications

  • Margin compression: If enforced, linking U.S. prices to much lower international benchmarks (often 50–70% below U.S. levels) could shave $50–100 billion annually off Big Pharma’s U.S. revenues The Guardian.

  • R&D headwinds: Trade‐group PhRMA warns that forced price cuts could reduce innovation budgets, potentially delaying or derailing late‐stage pipelines AP News.

  • Supply‐chain reshoring: To curry regulatory or tariff relief, companies may accelerate U.S. on‐shore API and finished-dose manufacturing—benefiting domestic CMOs and engineering partners.

Potential Winners

Ticker

Name

R/R Rating

Rationale

Citation

TEVA

Teva Pharmaceuticals

8 / 10

Leading generic‐drug player; lower reference prices expand generics’ share when branded pricing falls AInvest.

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MYL

Mylan (Viatris)

8 / 10

Broad off‐patent portfolio; stands to gain as insurers and PBMs shift volume toward generics.

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VRTX

Vertex Pharmaceuticals

7 / 10

Heavy U.S. manufacturing footprint; could qualify for reshoring incentives and buffer margin hits AInvest.

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CTLT

Catalent

6 / 10

CMO to brand and generic makers; outsourced fill/finish work may accelerate as on-shore capacity grows.

—

Potential Losers

Ticker

Name

R/R Rating

Rationale

Citation

LLY

Eli Lilly

2 / 10

GLP-1 franchise (Mounjaro, Zepbound) faces steep markdown risk—could see U.S. price cuts north of 50 %.

turn18news9

PFE

Pfizer

3 / 10

Blockbuster vaccines and oncology drugs likely on the MFN list; U.S. price parity could shave outsized profits.

turn18news9

MRK

Merck

3 / 10

Key brands (Keytruda) exposed to international benchmarks; volume growth won’t offset margin squeeze.

turn18news9

BMY

Bristol Myers Squibb

3 / 10

Immuno-oncology drugs heavily U.S.‐priced; potential 40–60 % cuts could erode free cash flow.

turn18news9

AMGN

Amgen

3 / 10

Biologics like Repatha and Enbrel subject to steep rebate and reference‐price pressure abroad.

turn18news9

Bottom Line:
Trump’s MFN order ramps up the odds of a structural reset in U.S. drug pricing—good for lower-cost generics and domestic manufacturing plays, painful for high-margin biologics and blockbusters. Short term, expect choppy trading; longer‐term, the winners will be companies whose core business thrives at lower price points (TEVA, MYL, Vertex), while legacy branded drugmakers (LLY, PFE, MRK, BMY, AMGN) face genuine margin risk and should be rated conservatively unless explicit carve-outs emerge.

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