By Michael Every of Rabobank

This is no time for traditional economic and market methods of poring over old data. Q1 US GDP, -0.3% q-o-q annualized, tells us nothing about what will happen given its all-over-the-place components driven by preparations for a trade war now underway. Nowcasts for Q2 GDP are already showing it back to around 2.4%, but that’s again with two months of the quarter to go and US retail inventories sitting at around 5-7 weeks, after which nobody knows what will happen as the upcoming Port of LA cargo totals are set to drop by around a third year on year.

GDP was negative because of only two components:

– Trade/Imports subtracted 4.83% on tariff frontrunning
– Government subtracted 0.25%, first negative govt “contribution” since 2022 pic.twitter.com/6Ng0qyQCZ5

— zerohedge (@zerohedge) April 30, 2025

The only way to make any kind of forecast is to try to project what will happen in the bigger scheme of things. Or, to laugh at President Trump posting, ‘This isn’t my stock market’, because it’s going down, three months after claiming, ‘This is my stock market’, because it was going up, and presume there is no pattern to anything that’s going on.  Rather than indulge in the latter, which is easy, let’s try the former, which is hard.

In the trade war, the US Senate narrowly rejected an attempt to overturn Trump’s tariffs: we are stuck with them until he decides we aren’t. On which, Trump said he expects a great relationship with PM Carney, which may not bode well for Canada, as Alberta’s Premier laid down the law to the PM and flirted with the idea of independence. 

Moreover, the USTR says several trade deals are “close”, again: again, it’s Japan, South Korea, and India being name-dropped. If/when a first deal is signed, markets will have a clearer idea of what lies ahead: yet Trump just said he’s in no rush, and as we’ve laid out, what lies ahead likely involves a new bloc vs China that would resolve many uncertainties while creating vast new ones.

Anyone thinking better US-China trade ties are on the cards too, which apparently includes the US President in his latest comments, isn’t paying much attention (including to the headline writers not noting that he said this deal would be “on our terms” and “fair”). Rather, at the very least, escalation to deescalate is underway. 

Congress just reintroduced a bipartisan SHIPS bill to increase US shipbuilding, targeting 250 commercial vessels over the next decade, which includes the dropped USTR port fee for non-Chinese firms ordering China-built ships; subsidies for US shipbuilders; preferential treatment for US cargo; and requiring a rising % of US imports from China be transported on US-built ships. All this will have a disruptive effect on global trade we’ve already spelled out; yet the emergence of such legislation was predictable to those who read maritime history rather than just Bloomberg.

Moreover, China, whose PMI data yesterday showed trade war impact, was also reported to be months away from running out of copper: it’s not just the West that is reliant on key imports: and the US knows what they are and where they get them from.

As such, on the geopolitical front –which is joined at the hip to trade– things are also moving. 

The US and Ukraine signed the 50/50 minerals investment deal. Treasury Secretary Bessent stated: “This agreement signals clearly to Russia that the Trump Administration is committed to a peace process centred on a free, sovereign, and prosperous Ukraine over the long term.” Kyiv hopes the US may also increase defence aid, which would be useful given Europe and the UK just admitted they can’t find enough troops for the peacekeeping contribution they’ll have to make.

Many decrying Trump trying a statecraft Noxin (reverse Nixon) will cheer a US hard line vs Russia. However, the alternative means economic statecraft against Moscow: Senator Graham is pushing legislation to impose 500% secondary tariffs on anyone who buys Russian energy, which would have a destabilising impact on energy markets. Would those decriers call for actual war but not economic warfare, “because markets”? Would Russia buckle and strike peace and Noxin deals?

The troika of Charlie Kirk, Tucker Carlson, and Donald Trump, Jr. make clear they don’t want war with Iran even if the terms of a deal –no more uranium enrichment– seem unreachable, and Israel remains implacable in its opposition to a can-kicking exercise that sees it carry the realpolitik can if Iran then builds a nuke. Meanwhile, Saudi Arabia, trying to please the US, said that it will keep pumping oil even as prices decline. 

On two related fronts we have either a sustained bear market in oil or a rapid geopolitical move higher. Interestingly, and relatedly, the US Koch brothers just exited energy trading in what is being described as a “retreat from speculation.” NB that’s exactly what economic statecraft wants to see, as commodities, not “because markets”, are going to be a key focus of it ahead.

Moreover, things are moving in the financial system too, and not just in terms of bond yields grinding lower in DM but moving higher in EM like Argentina and Brazil. Yesterday, the US Treasury released a report on dollar stablecoin usage with huge implications for the structure of markets, and which benefits the US over others. They talk of higher deposit rates, a huge inflow into US T-bills, and much more – and most of it benefitting the US at the expense of others. Does that make it more or less likely to happen ahead? I’m asking for a friend who usually focuses on GDP.

In short, we have sharply binary geopolitical outcomes ahead and either: sustained trade chaos, with one set of implications for the world economy; or a US retreat, with another set of implications (and second, third, nth order effects the people who want to see it happen don’t grasp at all); or a clear global bifurcation between the US and China across still-variable geography and asset classes. 

Please put that all into your GDP model and tell me what it says. 

As House Republicans race to pass President Trump’s sweeping domestic policy package, serious internal divisions remain unresolved, casting doubt over whether the party can meet its own ambitious deadlines.

Speaker Mike Johnson has set a tight three-week window to pass a massive reconciliation bill intended to enact the core of Trump’s economic agenda. Yet as of May 1, lawmakers remain deadlocked on several of the package’s most contentious provisions, from tax policy to cuts in federal safety-net programs.

“We’re working through each of the final issues,” House Majority Leader Steve Scalise told Punchbowl News, acknowledging that the package is “coming down the wire” even as four committees have already advanced their legislative proposals. Behind the scenes, however, critical components of the legislation remain in flux.

Major Tax Questions Still Unanswered

Nowhere is the uncertainty more apparent than in the House Ways and Means Committee, where the $4.5 trillion tax section of the package remains in limbo. A formal markup has not been scheduled, though May 8 is being discussed as a target date, Punchbowl reports.

One of the most intractable issues is the state and local tax (SALT) deduction cap. Several Republican lawmakers from high-tax states, especially New York, are pressing for the $10,000 cap to be lifted or substantially increased. Speaker Johnson met Wednesday with members of the SALT Caucus to gather “final feedback” before a new cap is finalized.

But lawmakers involved in the talks described them as far from conclusive. “We’re still far away from being done,” said Representative Nick LaLota, Republican of New York. Proposals to raise the cap to $25,000 have failed to unify the group, and disagreements persist over how to address the so-called marriage penalty, which currently imposes the same cap on joint filers as on single taxpayers.

For GOP reps like LaLota and Mike Lawler, also of New York, resolving the SALT issue is politically non-negotiable.

Medicaid Cuts Draw Moderate Resistance

Similar discord surrounds proposed Medicaid changes. Republicans on the House Energy and Commerce Committee continue to deliberate over how to achieve $880 billion in savings, a task that has sparked pushback from centrist members concerned about the scale of potential cuts.

Representative Juan Ciscomani of Arizona said talks were “making progress” following a meeting with Committee Chair Brett Guthrie. Still, disagreements remain, particularly over proposals to impose per capita caps on Medicaid spending – a sticking point for members like Representative Don Bacon of Nebraska, who supports no more than $500 billion in total reductions.

“For them to do any more,” Mr. Bacon said, “they’re going to have to prove it doesn’t hurt people’s health care or hospitals.”

Energy and Commerce is scheduled to hold a markup on May 7, with Republicans on the panel meeting again Thursday morning to try to bridge remaining divides.

Food Stamp Reform in Flux

The Supplemental Nutrition Assistance Program (SNAP) has also emerged as a flashpoint. The House Agriculture Committee is under pressure to find $230 billion in savings but has yet to finalize a plan.

Chair Glenn Thompson of Pennsylvania is opposed to cutting benefits and instead favors a cost-sharing model that would shift more of the financial burden to states. However, that idea has drawn criticism from both the White House and within the Republican conference.

Mr. Bacon has suggested a simpler solution: scale back the required savings. “They need to lower the $230 [billion] to $100 [billion],” he said.

Mr. Thompson has signaled that he does not want to see changes to the Thrifty Food Plan, a government benchmark for SNAP benefit levels. But the path forward remains unclear as Republicans weigh political risks and the Trump administration awaits feedback on key proposals.

Clock’s ticking guys…

Trump administration officials have indicated they want Congress to complete the reconciliation process by July 4. Yet with major pieces of the package still unresolved, that deadline appears increasingly difficult to meet.

The current impasse reflects a broader challenge facing House Republicans: how to reconcile ideological differences within their own ranks while moving forward on a sprawling policy package. Each committee’s internal debate has created ripple effects, complicating the broader legislative effort.

The coming weeks will test whether the Republican leadership can align its members around the former president’s agenda – or whether the reconciliation effort will stall under the weight of unresolved conflicts.

Trump national security adviser Mike Walz and his deputy, Alex Wong, are out of a job in the White House following an incident in late march in which Waltz ‘inadvertently’ added The Atlantic‘s Jeffrey Goldberg to a Signal chat which included discussions with top national security officials – and VP JD Vance – about plans for a military strike on Houthi targets in Yemem, CBS News  and Politico report (so we’re just waiting for the denial).

According to ‘multiple sources familiar with their departure,’ following the Signal snafu, Waltz admitted behind closed doors to the authenticity of Goldberg’s reporting – however he never offered to resign, and President Trump did not ask him to step down.

Wong, meanwhile, served in the first Trump administration as deputy special representative for North Korea, as well as deputy assistant secretary for East Asian and Pacific Affairs at the State Department.

The Signal fiasco set off a firestorm of calls for Defense Secretary Pete Hegseth to resign…

Goldberg is still trying to blame Hegseth for everything, when Michael Waltz is the one responsible for the entire snafu.

Now why would that be? Why would Goldberg repeatedly attack a victim of the breach instead of HIS FRIEND WHO SECRETLY INVITED HIM IN?

It’s a real mystery. https://t.co/vjq9hO35P6

— Sean Davis (@seanmdav) March 25, 2025

Among some 18 individuals listed as members of a Signal group that Goldberg was ‘inadvertently’ invited to included Defense Secretary Pete Hegseth, Vice President Vance, national security adviser Michael Waltz, Secretary of State is Marco Antonio Rubio, and Director of National Intelligence Tulsi Gabbard.

According to Politico, the White House has been discussing names for a replacement ‘for weeks,’ but ‘the plans to remove Waltz potentially as soon as this week gained steam in recent days.’

Were Waltz and Wong ‘Loomered‘?

When SignalGate exposed that Atlantic editor Jeffrey Goldberg was added to a Trump admin group chat, I did some digging.

Alex Wong is Mike Waltz’s Deputy NatSec Advisor. He’s married to a DOJ attorney named Candace Chiu Wong who worked under Biden AND Obama.

You’re not hearing… pic.twitter.com/eTqOJElyV7

— Loomer Unleashed (@LoomerUnleashed) March 30, 2025

SCALP https://t.co/adHatO6Sgm

— Laura Loomer (@LauraLoomer) May 1, 2025

*  *   *

The Kremlin has said that what the newly signed minerals deal between Ukraine and Washington does is effectively force Kiev to pay for all future military aid.

“Trump has broken the Kyiv regime to the point where they will have to pay for U.S. aid with mineral resources,” Medvedev, a former Russian president and current deputy chairman of Russia’s Security Council, stated on Telegram.

“Now they will have to pay for military supplies with the national wealth of a disappearing country,” he said of the Ukrainians.

As of yet, the full contents of the newly inked deal, finalized and signed late in the day Wednesday, have not been revealed, but it gives the United States preferential access to new Ukrainian minerals deals and its natural resources like oil and gas, and will fund investment in Ukraine’s reconstruction.

But the Zelensky government was able to get something crucial dropped at the last minute. As CNN details, “Compared to earlier drafts, the final agreement is reportedly less lopsided in favor of the US and is not as far-reaching. It stipulates that future American military assistance to Ukraine will count as part of the US investment into the fund, rather than calling for reimbursement for past assistance.”

President Trump’s initial reaction after the signing was seen in the following:

Speaking Wednesday in a call with NewsNation, Trump said he made the deal to “protect” Washington’s contribution to the Ukrainian war effort. “We made a deal today where we get, you know, much more in theory, than the $350 billion but I wanted to be protected,” Trump said.

“I didn’t want to be out there and look foolish,” he continued, voicing the administration’s longtime complaints that Zelensky only asks for “more and more” – and yet is still losing the war.

Meanwhile, the ceasefire process is still basically stalled, as neither side has backed off of their demands and conditions. President Zelensky has recently reiterated that he can’t even legally give up Crimea.

However, Trump presidential special envoy for Ukraine and Russia Keith Kellogg has told Fox News that Ukraine is ready to make territorial concessions, but wouldn’t see any ceded territory as a permanent situion. 

Treasury Secretary Scott Bessent says the signing of the “minerals deal” shows there is “no daylight” between the US and Ukraine. So that’s a disappointment for anyone who might have wished for greater daylight between the US and Ukraine

— Michael Tracey (@mtracey) May 1, 2025

“Not de jure forever, but de facto, because the Russians actually occupy that and they’ve agreed to that. They know that if they have a ceasefire in place, which means you sit on the ground that you currently hold, that’s what they’re willing to go to,” the envoy said. “You have your line set, and they’re willing to go there,” Kellogg emphasized. 

But it’s clear the Kremlin sees this as an issue of sovereignty and permanence, given President Putin has described the four annexed territories and Crimea as “ours forever”.

So far this year, employers have announced 602,493, the highest year-to-date total since 2020 when 1,017,812 job cuts were recorded, according to the latest data from global outplacement and executive coaching firm Challenger, Gray & Christmas.

It is up 87% from the 322,043 cuts announced during the same period in 2024.

The Government leads all sectors in job cuts this year with 282,227; 281,452 of which are attributed to DOGE-related cost-cutting. 

This is up 680% from the 36,195 job cuts announced in this sector through April 2024. In April, the number of job cuts announced in this industry was 2,782. DOGE actions were attributed to 2,731, while the rest were attributed to “Economic Conditions” and “Cost-Cutting.”

• “DOGE Actions” lead all job cut reasons in 2025 with 283,172; 2,919 of which occurred in April. Another 6,945 cuts were attributed to “DOGE Downstream Impact” through April, primarily at Non-Profits and Education organizations. These reasons combined (290,117) make up 48% of all job cuts announced so far in 2025. 

• Market/Economic Conditions were cited for 95,348 job cuts, as economic uncertainty, consumer spending, and trade difficulties impact US-companies. 

Tariffs were cited for 1,413 cuts so far this year, with 1,350 occurring in April. Restructuring accounted for 67,627, and 60,551 were due to store, unit, or location “Closing.”

This weak labor market data comes on the heels of yesterday’s dismal ADP Employment report.

This morning we see initial jobless claims jump notably too – to 241k (higher than the 223k expected). While not out of recent norms, this is a sizable jump…

Source: Bloomberg

Interestingly, New York dominated the surge in initial claims…

Continuing jobless claims also surged last week, back above 1.9 million Americans – its highest since Nov 2021…

Continuing claims for the ‘Deep TriState’ rose significantly last week…

Source: Bloomberg

As SouthBay Research highlights, the ~80K jump in Continuing Claims is relatively broad, with core drivers being New York (+14K), California (+9K), Connecticut (+5K), New Jersey (+4K), Texas (+6K). 

This most definitely points to economic headwinds translating into lower payrolls. 

While the 1-week 80K jump stems mainly from the seasonal adjustments (Non Seasonally Adjusted Continuing Claims rose 26K), it clearly points to lower hiring underway in the first 2-weeks of April. Precisely when the Nonfarm Payroll Survey was done.

Still, in context, it seems CEOs are all willing to whine about the economy but their actions speak louder than their words…

“Though the Government cuts are front and center, we saw job cuts across sectors last month. Generally, companies are citing the economy and new technology. Employers are slow to hire and limiting hiring plans as they wait and see what will happen with trade, supply chain, and consumer spending,” Andrew Challenger, Senior Vice President and workplace expert for Challenger, Gray & Christmas.

…and none of this is a good sign for tomorrow’s all-important payrolls print.

US equity futures are sharply higher, erasing all of April’s losses on blowout earnings from MSFT and META, and relief over signs the Trump administration is stepping back from its harshest tariff threats. As of 8:00am ET, S&P futures rose 1.2% to 5655, the highest level since before Trump’s Liberation Day announcement and pointing to an eighth consecutive session of gains for the cash index; Nasdaq futures gained 1.7%, as META and MSFT added +6.3% and +7.8%, respectively; most Mag 7 names, NVDA (3.7%) and semis are higher given META’s CapEx increase and MSFT’s reiteration on CapEx guidance. The dollar is higher after the BOJ finally flipped dovish and slashed its growth target pushing USDJPY to 144.5 this morning. It’s light on overnight news as most of Europe is closed today ex-UK along with China; US/Ukraine signed an agreement over the country’s natural resources, UK Manf PMI printed better but remained in contraction, and Trump reiterated that there is a “very good chance” of a deal with China on NewsNation last night. Commodities are mostly lower: WTI -1.2%; Gold -1.7%. The US economic calendar includes weekly jobless claims (8:30am), April manufacturing PMI (9:45am), ISM manufacturing and March construction spending (10am). Fed’s external communications blackout ahead of the May 7 FOMC meeting. Apple and Amazon results are due after the market close.

In premarket trading, the Magnificent Seven are mostly higher: Microsoft (MSFT) gains 8% after the company reported stronger-than-expected quarterly sales and profit growth. Meta (META) jumps 6% after the company’s advertising sales quelled Wall Street concerns about the impact of the Trump administration’s trade war. Apple was the only tech giant in the red, falling 1.4% after a federal judge said in a ruling that it violated a court order requiring it to open up the App Store to third-party payment options (other Mag7s are up Nvidia +4.6%, Amazon +3.7%, Alphabet +1%, Tesla +0.7%).
McDonald’s Corp. (MCD) declines 1.4% as sales fell in the first quarter, reflecting a deterioration in consumer sentiment that’s making it harder for restaurants to lure in diners. Eli Lilly & Co. (LLY) drops 5% after the company cut its earnings outlook. Here are some other notable premarket movers:

• Align Technology rises 10% after the Invisalign company reported quarterly shipments that beat the average analyst estimate.
• Confluent Inc. falls 10% after the provider of a streaming platform gave an outlook for second-quarter subscription revenue that fell shy of expectations. First quarter results showed a slowdown in additions of customers with $100,000 in annual recurring revenue.
• CVS Health rises 8% after the company boosted its adjusted earnings per-share-guidance for the full year and reported better-than-expected results for the first quarter
• E2open shares are up 34% after WiseTech Global, in response to media reports about its being in discussions to acquire E2open, said it was participating in a strategic review process.
• KKR & Co. rises 2% after the investment firm reported assets under management that beat the average analyst estimate. Fee-related earnings also came in above analysts’ expectations.
• Qualcomm falls 5% as the biggest maker of chips that run smartphones gave a tepid revenue prediction for the current quarter, underscoring concerns that tariffs will hurt demand for its products.
• Robinhood gains 4% after the trading platform’s earnings largely beat expectations, with analysts highlighting positive trends in April amid market volatility and a boost from a lower tax rate.
• Shake Shack falls 3% after posting first-quarter results.
• Wayfair gains 5% after posting adjusted earnings per share for the first quarter that beat the average analyst estimate.

Tech giants added to investor optimism that deals between the US and its partners would limit the damage from Trump’s trade war. Wall Street ended a tumultuous month on a day in which the S&P 500 erased an intraday drop of more than 2% to close 0.2% higher. Traders sought reassurance in bets on Federal Reserve easing after the US economy contracted for the first time since 2022. 

“So far we’re seeing big tech companies deliver on earnings, which is reassuring, and it’s this reassurance which is supporting equity market futures,” said Georgios Leontaris, chief investment officer for EMEA at HSBC Global Private Banking. “The other element of the story beyond earnings is obviously the ongoing debate as to whether we’ve seen peak tariff noise or not.”

Apple results are due after the market close. Analysts will be listening closely for any further detail on how the company, whose supply chain is reliant on China, Vietnam, and India, views the impact of tariffs

The White House said it was nearing an announcement of a first tranche of trade deals with partners that would reduce planned tariffs. Sentiment was also helped by a report that the US has been proactively reaching out to China through various channels. At the same time, Trump said he would not rush deals to appease nervous investors.

The US and Ukraine reached a deal over access to the country’s natural resources, offering a measure of assurance to officials in Kyiv who had feared Trump would pull back his support in peace talks with Russia.

Elsewhere, most markets in Europe and many in Asia are shut for holidays. The UK’s FTSE 100 index was steady, following 13 days of gains, the longest winning streak since 2017. Gains in material and industrial names are offset by losses in energy and health care. 

In FX, the Bloomberg Dollar Spot Index rises 0.3%. the yen is the weakest of the G-10 currencies, falling 0.9% against the greenback after the Bank of Japan pushed back the timing for when it expects to reach its inflation target and slashed its growth forecasts. The pound and euro are little changed.

In rates, treasuries climb, pushing US 10-year yields down 2 bp to 4.14%. Treasury spreads remain within a basis point of Wednesday’s close, as gains remain broad-based across the curve. Gilts are steady, with UK 10-year borrowing costs flat at 4.44%. Treasury futures edge higher into the early US session, on the day’s highs with yields lower by 1bp to 2bp across the curve. US session focus includes weekly jobless claims along with both ISM and PMI manufacturing reports.

In commodities, oil prices decline, with WTI falling 2.3% to below $57 a barrel; the drop followed the biggest monthly drop since 2021, as signs that the Saudi-led OPEC+ alliance may be entering a prolonged period of higher output added to concerns the trade war will hurt demand.  Spot gold is down $65 at $3,223/oz, falling for a third day on signs of potential trade-talk progress between the US and several other nations, quelling demand for havens even as signs of slowdowns have emerged in the largest economies. Bitcoin rises 1% and above $95,000. 

Looking at today’s calendar, we get the April Challenger job cuts (7:30am), weekly jobless claims (8:30am), April manufacturing PMI (9:45am), ISM manufacturing and March construction spending (10am). Fed’s external communications blackout ahead of the May 7 FOMC meeting

Market Snapshot

• S&P 500 mini +1.2%
• Nasdaq 100 mini +1.6%
• Russell 2000 mini +0.3%
• Stoxx Europe 600 little changed
• DAX +0.3%
• CAC 40 +0.5%
• 10-year Treasury yield -2 basis points at 4.15%
• VIX -0.9 points at 23.85
• Bloomberg Dollar Index +0.2% at 1226.38
• euro little changed at $1.1324
• WTI crude -2% at $57.02/barrel

Top Overnight news

• The US and Ukraine signed an agreement over access to the country’s natural resources. The deal will see the US will get first claim on profits transferred into a jointly managed investment fund that’s intended in part to reimburse the US for future military assistance. BBG
• House Republicans are seriously considering proposals to further limit tax deductions that companies can take for their highest-paid workers’ compensation, expanding restrictions that now apply only to a handful of current or former executives making more than $1 million, according to people familiar with the discussions. WSJ
• US President Trump said we are going to have ‘Made in the USA’ like never before and he stated give us a little time to get moving regarding the economy. Furthermore, Trump said interest rates should go down and reiterated that “he (Powell) should reduce interest rates, I understand them better than him”, as well as noted it would be nice for people wanting to buy homes and things.
• There was some chatter that the House Ways and Means Committee is going to mark up their tax package on May 8th: Punchbowl.
• Elon Musk said he’s considering sending DOGE to the Fed, citing a costly renovation of its headquarters as an example of potential government waste. BBG
• The yen dropped as much as 1.2% after the BOJ pushed back the timing for when it expects to reach its inflation target and Governor Kazuo Ueda spoke of uncertainties due to tariffs. For now, policymakers kept rates at 0.5%. BBG
• China feels the white house is “too divided” on trade policy and will hold off on entering serious trade talks with the US while it waits to see which of Trump’s advisors will have his ear and how other countries respond to the 90 day pause on tariffs. SCMP
• Saudi Arabian officials are briefing allies and industry experts to say the kingdom is unwilling to prop up the oil market with further supply cuts and can handle a prolonged period of low prices, five sources with knowledge of the talks said. This possible shift in Saudi policy could suggest a move toward producing more and expanding its market share, a major change after five years spent balancing the market through deep output as a leader of the OPEC+ group of oil producers. RTRS
• The EU is planning to share a paper with the US next week that will set out a package of proposals to kick-start trade negotiations with the Trump administration. The paper will propose lowering trade and non-tariff barriers, boosting European investments in the US, cooperating on global challenges such as tackling China’s steel overcapacity and purchasing US goods like liquefied natural gas and technologies. BBG
• Janet Yellen has warned that Trump’s tariffs will have a “tremendously adverse” impact on the US economy as they “hobble” companies that rely on critical mineral supplies from China. She added: “I’m not yet ready to say that I’m forecasting a recession, but certainly the odds have gone way up. FT
• Microsoft beat estimates and showed strong growth in its key Azure cloud business, while Meta also topped estimates and raised its full-year capex forecast as it continues to invest in AI. With first-quarter earnings in full swing the scorecard so far has shown resilience amid Trump’s trade war. The next big test comes after the close, when Apple and Amazon report. BBG

Tariffs/Trade

• US President Trump reiterated there is a very good chance that they will make a deal with China and any deal has to be on their terms, while he added that they are negotiating with India, South Korea and Japan.
• US President Trump said after a certain amount of time, there will be a tariff wall for pharmaceutical companies.
• USTR Greer said it is a matter of weeks not months to have initial trade deals announced and he is meeting with Japan, Guyana and Saudi Arabia on Thursday and with the Philippines on Friday. Greer added he wouldn’t say they are ‘finish-line’ close on an India trade deal but noted he has a standing call with India’s Trade Minister and said they are working closely with the UK and moving quickly with countries ready to move forward on trade. Furthermore, Greer said Canadian PM Carney is a serious person and that President Trump wants a healthy relationship in North America, while he added there are no official talks with China yet and that harmful foreign trade practices, including those in China, need to be addressed.
• China is to hold off on entering serious trade discussions with the US while it waits to see which of US President Trump’s advisers will have his ear and how other countries will respond to the 90-day pause on tariffs, according to a source cited by SCMP
• US Senate narrowly rejected a bipartisan measure to block Trump tariffs with the vote count at 49-49.

Notable Earnings

• eBay Inc (EBAY): Shares +0.5% pre-market. Q1 profit beat estimates, and revenue also increased. The company announced that Peggy Alford was appointed CFO, replacing Steve Priest, as the company adjusts its leadership. It reported Q1 adj. EPS of 1.38 (exp. 1.34), Q1 revenue of USD 2.6bln (exp. 2.55bln). Q1 gross merchandise volume USD 18.75bln (exp. 18.52bln); International GMV USD 9.69bln (exp. 9.58bln); US GMV USD 9.07bln (exp. 8.92bln). In Q1, it had 134mln active buyers (exp. 134.17mln). Sees Q2 revenue between USD 2.59-2.66bln (exp. 2.60bln), and sees Q2 adj. EPS between 1.24-1.31 (exp. 1.29). (Newswires)
• Meta Platforms (META) – Shares +6.5% pre-market following a Q1 beat, while Q2 guidance was in line with expectations. Q1 revenue rose +16% to USD 42.31bln (exp. USD 41.4bln), with EPS of USD 6.43 (exp. USD 5.28); Q1 advertising sales were USD 41.39bln (exp. 40.55bln). Exec said daily users reached 3.43bln, while Threads has now has more than 350mln monthly active users. FY25 CapEx guidance was increased to USD 64–72bn for 2025 (prev. saw 60-65bln), and exec said that increased CapEx will bring data centre capacity online quicker. On AI, exec said its Meta AI app is focused on scaling and engagement this year, with business integration planned for next year; nearly 1bln monthly active users now use Meta AI across its apps. Exec also said that the EC’s ruling may hit its EU business, where it will need to make modifications to ads model which could have significant impact to European business and revenue as early as Q3, while Asia ad spend fell amid regulatory uncertainty. Sees Q2 revenue between USD 42.5bln-45.5bln (exp. 44.41bln), lowered its FY25 total expenses view to USD 113bln-118bln (prev. saw 114-119bln). (Newswires)
• Microsoft (MSFT) – Shares +8.1% pre-market following a beat on Q3 sales and profits, driven by 20% cloud growth amid strong AI demand. The tech giant reported Q3 adj. EPS of 3.46 (exp. 3.21), Q3 revenue USD 70.1bln (exp. 68.41bln); Q3 CapEx USD 16.75bln (exp. 16.28bln). Azure and other cloud services revenue (Ex-FX) surged +33% (exp. +31%), with Azure growth attributable to AI 16pts (exp. 15.6ppts); the majority of Azure outperformance in Q3 was in its non-AI business. Q3 Cloud sales USD 42.4bln (exp. 42.22bln), Q3 Intelligent Cloud sales USD 26.8bln (exp. 25.99bln). Exec said H2 total CapEx view remains unchanged vs January guidance. Sees Q4 revenue between 73.3bln-73.4bln (exp. 72.0bln), Q4 CapEx expected to increase on a sequential basis, Q4 cloud gross margin expected to be 67% (down Y/Y), Q4 Intelligent Cloud revenue seen between USD 28.75bln-29.05bln (exp. 28.52bln), while Q4 Azure and other cloud services revenue growth is expected to be 34-35% in constant currency. Exec said that FY26 CapEx is expected to grow at a lower rate than FY25. (Newswires)
• Qualcomm (QCOM) – Shares +5.7% pre-market after it topped Q2 top- and bottom-line estimates, but Q3 guidance was light, and it sees a sales hit from US tariffs ahead. It reported Q2 adj. EPS 2.85 (exp. 2.80), Q2 revenue USD 10.84bln (exp. 10.60bln); Q2 QCT revenue USD 9.47bln (exp. 9.23bln), Q2 QTL revenue USD 1.32bln (exp. 1.35bln); Q2 Internet of Things revenue USD 1.58bln (exp. 1.45bln), Handsets revenue USD 6.93bln (exp. 6.84bln), Automotive revenue USD 959mln (exp. 909.8mln). Sees Q3 adj. EPS 2.60-2.80 (exp. 2.66), Q3 revenue between USD 9.9-10.7bln (exp. 10.33bln), sees Q3 QCT revenue between USD 8.7-9.3bln (exp. 8.98bln), and sees Q3 QTL revenue between 1.15-1.35bln (exp. 1.3bln). (Newswires)

A more detailed look at global markets courtesy of Newquawk

APAC stocks traded higher but with gains capped in severely thinned conditions owing to mass holiday closures across the region and in Europe for Labour Day. ASX 200 eked mild gains as the outperformance in tech, real estate and consumer staples was offset by losses across the commodity-related sectors, while trade data was mixed as Australian monthly exports returned to growth but imports contracted. Nikkei 225 advanced at the open after having reclaimed the 36,000 level and with further upside seen after the BoJ policy announcement where the central bank kept rates unchanged at 0.50% and provided some dovish rhetoric despite maintaining its rate hike signal.

Top Asian News

• BoJ maintained its short-term interest rate target at 0.5%, as expected, with the decision made by unanimous vote, while it said it will continue to raise the policy rate if the economy and prices move in line with its forecast and will conduct monetary policy appropriately from the perspective of sustainably and stably achieving the 2% inflation target. BoJ said Japan’s economic growth is likely to moderate and underlying consumer inflation is likely to be at a level generally consistent with the 2% target in the second half of the projection period from fiscal 2025 through 2027, as well as noted that uncertainty surrounding Japan’s economy and prices remains high with risks to the economic outlook and inflation outlook are skewed to the downside. Furthermore, it lowered its evaluation of the economic outlook and warned that a prolonged period of high uncertainties regarding trade and other policies could lead firms to focus more on cost-cutting, and as a result, moves to reflect price rises in wages could also weaken. In terms of the Outlook Report projections, the Real GDP median forecast for Fiscal 2025 was cut to 0.5% from 1.1% and the Fiscal 2026 estimate was cut to 0.7% from 1.0%, while the Core CPI median forecast for Fiscal 2025 was cut to 2.2% from 2.4% and the Fiscal 2026 forecast was cut to 1.7% from 2.0%.
• BoJ’s Ueda Press Conference: Uncertainty from trade policy has heightened sharply. Expect to keep raising rates if the economy and prices move as projected. Timing to attain the underlying 2% inflation target will be delayed. Price goal timing delay doesn’t mean delay in hikes; timing of trend inflation does not necessarily correlate with the timing of a hike.

Due to Labour Day across Europe, cash and derivatives markets are closed across Euronext services and those run by other European exchanges such as Deutsche Boerse, SIX and Nasdaq (Scandinavia closed ex-Copenhagen). The UK’s FTSE 100 is one of the few indices in Europe which is open today; currently flat.

Top European news

• EU is to present trade proposals to the US next week, according to Bloomberg citing officials.

FX

• DXY is up for a third consecutive session with the USD firmer vs. all major peers. On the trade front, the White House administration continues to talk up the possibilities of imminent trade deals. Reports suggest that the US reached out to China recently for tariff talks. However, Chinese press notes that China is to hold off on entering serious trade discussions with the US while it waits to see which of US President Trump’s advisers will have his ear and how other countries will respond to the 90-day pause on tariffs. Ahead, Challenger layoffs, weekly claims and ISM manufacturing PMI are all due. DXY ventured as high as 100.08, but has recently waned off that high to a current 99.75 level.
• EUR is essentially flat vs. the USD with most of Europe away from the market on account of Labour Day. In terms of macro updates for the region, Bloomberg reported that the EU is to present trade proposals to the US next week. EUR/USD hit a trough overnight at 1.1288 before returning to the 1.13 handle.
• JPY is the clear laggard across the majors after the BoJ opted to stand pat on rates (as expected) whilst cutting its Real GDP and Core CPI estimates in its quarterly outlook report; the FY 2025 GDP estimate saw a sizable downgrade to 0.5% from 1.1%. At the follow-up press conference by Governor Ueda, USD/JPY continued its ascent to a peak at 144.75 with Ueda noting that the timing to attain the underlying 2% inflation target will be delayed. However, upside was trimmed after he stated that a delay in the timing of the price goal doesn’t mean a delay in hikes.
• GBP is flat vs. the USD with incremental macro drivers remaining light. On the trade front, USTR Greer said the US is working closely with the UK and moving quickly with countries ready to move forward on trade. Local elections are taking place in the UK today with a focus on the extent of Conservative losses, the performance of Labour and how much ground the Reform Party can make; not expected to be a market mover. Cable has delved as low as 1.3275 but has since reclaimed the 1.33 mark and now sits around 1.3320. UK Manufacturing PMI was subject to an upward revision, but ultimately had little impact on the GBP.
• Antipodeans are both softer vs. the broadly firmer USD and tracking losses in global peers. AUD saw little follow-through from mixed trade data as Australian monthly exports returned to growth but imports contracted.

Fixed Income

• The BoJ left rates unchanged as expected. JGBs were bid though as the accompanying forecasts were lowered for both Real GDP and Core CPI, pushing back the timing for when underlying inflation is likely to be at a level generally consistent with the 2% target. In totality, this lifted JGBs from 141.05 to 141.34 though the upside did dissipate almost entirely in the gap between the announcement and Governor Ueda. Ueda for the most part stuck to the script of the statement and made it very clear that the BoJ is facing significant uncertainty in its forecasts. Ueda’s reiteration that there will be a delay to attaining the underlying 2% inflation target sparked another bout of dovishness, lifting JGBs to a fresh 141.42 peak.
• A very slow start to the session for USTs given the absence of European participants for Labour Day (China also away). USTs are firmer and at a 112-12 peak, but one that is shy of the 112-16 high from Wednesday. As was the case on Wednesday, any concerted move higher enters a patch of clean air before resistance at 114-03+ and 114-10 from early-April.
• Gilts opened higher by around 30 ticks before extending a handful more to a 93.86 peak, influenced by the upside seen in JGBs post-BoJ/Ueda. On the data front, April’s Manufacturing PMI was revised slightly higher (but still in contractionary territory) and a significant jump in Mortgage Lending during March; the latter comes alongside a 3bps drop in the effective rate on new and outstanding mortgages to 4.5% and 3.84% respectively during the period and ahead of Stamp Duty alterations which kicked in alongside the new FY in April.

Commodities

• Crude is on the backfoot and trading lower by around USD 1.00/bbl, in a continuation of the prior day’s downside. As a reminder, oil prices slumped on Wednesday following reports that Saudi officials briefed allies and industry experts that the kingdom can sustain a prolonged period of low oil prices.
• Gold is pressured given the positive risk tone in the US and as the Dollar makes modest gains. Yellow metal has been as low as USD 3.2k/oz, over USD 100/oz from the week’s opening levels despite the series of soft data for the US as the inflationary part of the stagflationary narrative and modest yield curve steepening weighs on XAU.
• Base metals were contained trade overnight given the mass holiday closures and absence of the metals largest buyer, China, for a long weekend (May 1st-5th). This morning, 3M LME Copper has picked up tracking the broader macro tone with US futures strong after earnings, 3M LME Copper back above the USD 9.2k mark.

Geopolitics: Middle East

• US Secretary of Defence Hegseth said Iran will pay the consequence for supporting Houthis.

Geopolitics: Ukraine

• US and Ukraine signed an agreement on access to natural resources and to establish a US-Ukraine reconstruction investment fund. It was also reported that the US Treasury said the Treasury Department and US International Development Finance Corporation will work with Ukraine to finalise programme governance and advance the partnership, while it added that the agreement signals clearly to Russia that the Trump administration is committed to a peace process centred on a free, sovereign, and prosperous Ukraine over the long term. Furthermore, Treasury Secretary Bessent said the US–Ukraine economic partnership agreement allows the United States to invest alongside Ukraine to “unlock Ukraine’s growth assets”.
• US Senator Graham, who is a close ally of President Trump, is forging ahead on a plan to impose new sanctions on Russia and steep tariffs on countries that buy Russian oil, gas and uranium, while the bill also would impose a 500% tariff on imported goods from any country that purchases Russian oil, gas, uranium and other products, according to WSJ.

US Event Calendar

• 7:30 am: Apr Challenger Job Cuts YoY, prior 204.8%, revised 204.78%
• 8:30 am: Apr 26 Initial Jobless Claims, est. 223k, prior 222k
• 8:30 am: Apr 19 Continuing Claims, est. 1864.5k, prior 1841k
• 9:45 am: Apr F S&P Global U.S. Manufacturing PMI, est. 50.5, prior 50.7
• 10:00 am: Apr ISM Manufacturing, est. 47.9, prior 49
• 10:00 am: Apr ISM Prices Paid, est. 73, prior 69.4
• 10:00 am: Mar Construction Spending MoM, est. 0.2%, prior 0.7%

By the numbers, April should be another strong month for the U.S. auto industry. According to analysis from Deutsche Bank’s auto team, led by Edison Yu, the seasonally adjusted annual rate (SAAR) for light vehicle sales is expected to come in at 17.5 million units.

That’s a sharp jump from the 16.0 million SAAR posted in April 2024 and only a modest decline from March’s 17.8 million pace. Sales volumes appear healthy across the board: total sales are up 11% year-over-year, with retail sales gaining 9% and fleet sales accelerating by 21%, the team wrote in a note out earlier this week.

Average transaction prices rose to $45,600—a 1.6% YoY increase—while industry-wide incentives fell 10.5% from March, signaling persistent consumer demand despite price inflation. One notable exception: Ford. The company raised its incentives 16% month-over-month, attributed to an aggressive employee pricing campaign aimed at clearing older inventory.

But while April paints a rosy picture, Deutsche Bank is flashing some warning signs for 2025. Last month, the firm cut its 2025 SAAR forecast to 15.4 million units, citing looming pressures from new tariffs and the inflationary impact of tightened final assembly rules. The analysis estimates automakers will need to raise prices by 6–12% just to comply with domestic assembly regulations—a figure that rises substantially when accounting for localized parts content.

In a market already stretched by affordability issues and rising interest rates, the prospect of further ATP hikes suggests that demand elasticity could finally buckle. What remains to be seen is how much more the American consumer can absorb before opting out of the new car market altogether.

In late April this same Deutsche team wrote that U.S. auto tariffs were increasingly looking like a permanent fixture and said they were closely monitoring how automakers are responding each week—particularly on pricing, incentives, and production shifts.

While the administration has hinted at potential relief, there’s still no clarity on what that might entail. For now, Deutsche Bank assumes a 25% tariff applies to all imported vehicles, except those qualifying under USCMA rules until customs can fully assess non-U.S. content. Imported parts are expected to fall under the tariff starting May 3rd.

Responses among automakers remain mixed. Ford plans to hike prices on new vehicles this month, Tesla is reportedly halting Chinese parts imports for its CyberCab and Semi programs, and layoffs are anticipated at Volvo truck plants.

Last week we noted that Deutsche Bank said automakers (OEMs) are adopting a wide range of strategies to navigate the uncertainty—adjusting pricing, incentives, and production plans on a rolling basis.

Authored by Frank Fong via The Epoch Times (emphasis ours),

The Chinese regime is increasingly sending groups that pose as nongovernmental organizations (NGOs) to the United Nations in an effort to suppress criticism of its human rights record, according to a report published by the International Consortium of Investigative Journalists (ICIJ) on April 28.

The 10-month investigation, a partnership between the ICIJ and 42 media organizations, examined China’s transnational repression under Chinese leader Xi Jinping. Part of the report focused on the communist regime’s subversion campaign against the U.N. Human Rights Council through “a growing army of Chinese NGOs.”

“Since Xi’s reelection as Communist Party general secretary in 2017 and president the following year, China has sought greater influence within the U.N. human rights system and become more aggressive in silencing dissent,” the report reads.

ICIJ found that the number of Chinese NGOs holding consultative status with the U.N. has nearly doubled since 2018.

NGOs can participate in U.N. meetings, make oral statements, and submit written statements before U.N. sessions after obtaining consultative status, which is granted by the U.N. Economic and Social Council.

An ICIJ analysis of 106 NGOs from China, Hong Kong, Macau, and Taiwan found that 59 are not independent but are “closely connected” to the Chinese Communist Party (CCP). The ICIJ referred to these Beijing-backed NGOs as “GONGOs” or “government-organized nongovernmental organizations.”

Ten of these GONGOs receive more than 50 percent of their funding from Beijing, the ICIJ noted.

In at least 46 of these groups, directors, secretaries, vice presidents, or other high-ranking staff also hold positions in the Chinese regime’s departments or within the CCP.

Additionally, 53 of these NGOs pledge loyalty to the CCP on their websites or in other official documents. Among them, 12 agree to defer their decision-making to the Party, such as leadership appointments.

“In 2024, 33 Chinese NGOs showed up about 300 times on the lists of speakers at Human Rights Council sessions. There were only three of them in 2018. None criticized China,” the report reads.

Rana Siu Inboden, senior fellow at the Strauss Center for International Security and Law at the University of Texas at Austin, was quoted in the report as saying that Beijing “is clearly using NGOs as a tool.”

“They are encouraging them, helping them, guiding them, coaching them through how to get this [consultative] status,” Inboden said. “And then once they’re [at the U.N.], you can see how their statements, whether it’s in the Human Rights Council or elsewhere, serve the government.”

China’s Tactics

Delegates from the Beijing-backed groups seek to “disrupt and drown out” criticism of China, heap praise on the CCP, and monitor and intimidate those who come to Geneva to testify against China.

“It’s corrosive. It’s dishonest. It’s subversive,” Michèle Taylor, who served as the U.S. ambassador to the U.N. Human Rights Council from February 2022 to January this year, was quoted as saying in the ICIJ’s findings.

Beijing-backed groups “are masquerading as NGOs” as part of a broader effort by the CCP “to obfuscate their own human rights violations and reshape the narrative around China’s actions and culpabilities,” Taylor said.

The ICIJ and its media partners spoke to 15 activists and lawyers dedicated to China’s human rights who “described being surveilled or harassed by people suspected to be proxies for the Chinese government,” according to the report. These incidents happened both inside the United Nations and in Geneva at large.

Some activists said that their relatives, whom they believed were pressured by Chinese authorities, had urged them to cease their public activism or cautioned them about the risks of their actions, according to the ICIJ.

The report cites an incident in March 2024, when some rights activists refused to set foot inside the U.N. buildings, out of fear that Beijing’s presence could result in retribution against their families in China.

“Instead, they gathered for a secret meeting on the top floor of a nondescript office building nearby. They were there to discuss human rights abuses in China and Hong Kong with the U.N. high commissioner for human rights, Volker Türk,” the ICIJ said.

In January last year, China was among several countries that underwent a peer review process called the “Universal Periodic Review” before the U.N. Human Rights Council.

Rushan Abbas, cofounder of the U.S.-based Campaign for Uyghurs, told ICIJ that after she and other NGO delegates entered the U.N. building where China’s review was being held, “those Chinese GONGOs were taking pictures of us.”

“I did not report [this] to the U.N. authorities because I lost faith in them, as China was acting … like the U.N. was its playground,” Abbas was quoted as saying in the report.

The ICIJ said that independent organizations now have a greater responsibility to speak out about atrocities due to the rise of autocracy around the world.

“If China’s power continues to go unchecked by U.N. authorities, it threatens the credibility of the institution in its efforts to monitor and document violations and abuses not just in China, but all over the world,” the group said.

Authored by Steve Cortes via The Epoch Times (emphasis ours),

Last November, Americans sent a clear election message and delivered President Trump a clear mandate: Prices are way too high. While inflation has hit our grocery stores (up 23.6% since 2020) and housing costs (up 30.9% since 2020), there’s another cost outpacing the rest when it comes to price hikes. Prescription drugs have jumped 46.2% since 2020, forcing Americans to pay the highest price in the world for life-saving medications. No wonder citizens are angry.

In 2022, Congress passed legislation that gave the Centers for Medicare and Medicaid Services (CMS) the authority to negotiate lower drug prices on behalf of Medicare beneficiaries for the first time. As this administration targets cost-saving measures across government, this program is projected to save billions of dollars, with an estimated $1.5 billion in savings for seniors next year alone and $100 billion in total taxpayer savings over 10 years.

Thankfully, President Trump knows how to negotiate. With his leadership, Medicare negotiation could be just the start in a larger effort to earn a better deal for Americans on prescription drugs. This issue presents an enormous opportunity for the president to bolster his legacy by protecting and expanding the government’s ability to crack down on corrupt lobbyists and special interests and allow the government to negotiate directly with drug manufacturers to lower prescription drug prices for the American people.

This issue is not new to President Trump, who has long railed against the corruption and greed in the pharmaceutical industry. He recognizes that “we pay, as a country, so much more for drugs because of the drug lobbies,” whom he says are “getting away with murder.” Trump’s solution? “Tougher negotiation [and] more competition [will lead to] much lower prices.” As one of the early voices calling for Medicare to negotiate drug prices back in 2016, this is his moment to make this promise into reality.

Now that he’s back in the White House, Trump can reaffirm his commitment to reducing costs for seniors and cutting government spending, two of his biggest priorities. Consistent with his clear mission to root out waste, fraud, and abuse in the federal government, he has already begun to implement this cost-saving plan by supporting and defending Medicare’s ability to negotiate lower drug prices.

If the drug lobby is successful in fighting against Trump by rolling back Medicare’s negotiation authority, the biggest winners would be – you guessed it – pharmaceutical companies, which would return to charging inflated prices, forcing both the government and everyday Americans to bear the cost, increasing prices of prescription drugs by a shocking 46.2%, effectively doubling their cost.

President Trump has long been a vocal critic of Big Pharma. His leadership can yet again make him the strongest voice ever in holding the industry accountable. Backing policies that rein in drug prices would be a major victory not just for his administration, but for every American family.

I know President Trump will continue to fight for the American people because he understands that Americans should never be taken advantage of by the drug lobby. This is President Trump’s chance to do it big by standing up to Big Pharma and ensuring drug prices come down. That’s a deal that every American can get behind.

Steve Cortes is a former advisor to President Donald Trump and Vice President J.D. Vance and a former commentator on Fox News and CNN.

While DOGE may have saved $160 billion so far, the Pentagon now ‘needs’ $150 billion of new funding under the guise of supporting various Trump priorities.

The House Armed Services Committee advanced the supplemental spending plan on Tuesday in a 35-21 vote during a markup hearing.

The plan was unveiled on April 27 by House Armed Services Committee Chairman Mike Rogers (R-AL) and Senate Armed Services Committee Chairman Roger Wicker (R-MS), with Congressional Republicans preparing it for reconciliation – a process which allows Congress to pass legislation concerning taxation and government spending without requiring the 60 Senate votes typically needed to invoke cloture and avoid a filibuster.

Republicans have several such reconciliation bills in the pipeline.

The military spending bill will now be added to a broader continuing resolution to fund the federal government through the remainder of FY2025. 

It provides $25 billion this year for Trump’s plan to overhaul the US missile defense network, as laid out in Trump’s January executive order calling for an “Iron Dome for America.”

As the Epoch Times notes further, other top priorities in the military spending supplemental include $34 billion to boost shipbuilding and $21 billion to replenish depleted munitions stockpiles.

Earlier this month, Trump signed executive orders aiming to boost U.S. shipbuilding and arms procurement capabilities.

The proposal also assigns around $14 billion for various innovation projects, including low-cost attritable weapons systems, $13 billion for efforts to modernize the U.S. nuclear arsenal, and $12 billion for general readiness projects like base infrastructure projects and efforts to boost stocks of spare parts.

Another $11 billion would go toward the U.S. military’s Pacific components to conduct training exercises and bolster regional defenses.

Another $7 billion would support various projects to enhance existing aircraft and develop new ones.

This would include $400 million to boost the development of the recently announced F-47 stealth fighter jet.

Border security would also get a spending boost.

The supplemental lays out $5 billion for Department of Defense and Department of Homeland Security efforts to prevent illegal border crossings, and to conduct immigration and counter-drug enforcement operations.

The bill calls for around $9 billion more for quality of life improvements for military personnel and their families.

The additional funding would increase allowances for housing, health care, and family assistance programs.

Opening the April 29 markup hearing, Rogers said: “The time for this level of investment is long overdue.”

Rep. Adam Smith (D-Wash.), by contrast, cast doubts as to whether the Defense Department could make efficient use of the new funding.

Smith, who is the committee’s ranking member, said: “I cannot support throwing another $150 billion that I absolutely guarantee you will not be well spent.”

Democrats on the House committee’s minority submitted 21 amendments to the Republican-led reconciliation bill, all of which failed to make it in.

One amendment that Smith offered called for all but 25 percent of the new funds to remain locked up until Defense Secretary Pete Hegseth orders a review of policies and procedures for handling classified and sensitive information.

Smith and other committee Democrats used the hearing to reiterate concerns about recent incidents in which Hegseth discussed military operations on the Signal messaging application.

Rep. Pat Ryan (D-N.Y.) also offered an amendment to reduce Hegseth’s salary to $1.

Ryan submitted yet another amendment to block any of the funds described in the military spending reconciliation bill from being made available to business entities operated by special government employees.

Billionaire entrepreneur and SpaceX CEO Elon Musk has been advising the Trump administration and has been designated as a special government employee.

Committee Democrats offered other amendments to block the Department of Defense from relieving senior officers of their commands or terminating different groups of civilian employees.

Other amendments would have made much of the proposed funds contingent on the completion of a successful department financial audit, a task the department has failed to achieve in the past seven consecutive years it has tried.