A Boost to U.S. Finances and a Drag on the British Economy

A Boost to U.S. Finances and a Drag on the British Economy — Diverging Impacts of Trade Policies on the West’s Two Largest Economies

While tariff revenues have helped reduce the U.S. budget deficit,
the same policies have triggered the first contraction in the British economy in six months.

 

 

Contents

 

 

 

 

United States

U.S. Budget Deficit Narrows in May, Driven by a Surge in Tariff Revenues
Data released by the U.S. Department of the Treasury on Wednesday showed that the U.S. federal budget deficit narrowed in May to $316 billion, a 9% decrease—or $31 billion—compared to the same month last year.

This decline was mainly driven by a sharp increase in tariff revenues, which hit a record $23 billion, up from just $6 billion in May 2024.

Since the beginning of the current fiscal year, tariff revenues have risen by 60%, reaching $86 billion. This contributed to a 15% year-over-year increase in total government revenues in May, which stood at $371 billion. Meanwhile, expenditures rose to $687 billion, up by $16 billion.

Additionally, interest payments on the U.S. national debt fell to $92 billion last month, an $11 billion drop compared to the same month last year, following another $1 billion decrease in April.

 

 

United Kingdom

UK Economy Sees First Contraction in Six Months Due to Tariff Shock
The United Kingdom’s economy experienced a sharp contraction in April, surpassing analysts’ expectations, as the negative fallout from escalating reciprocal tariffs imposed by the U.S. administration weighed on global trade.

According to official data released Thursday, the UK’s gross domestic product (GDP) shrank by 0.3% in April compared to March, whereas analysts had forecast only a slight 0.1% decline. The drop was driven by contractions in both manufacturing and services, while construction showed limited growth.

This marks the first monthly contraction in the British economy in six months, raising questions about the new government’s ability—under Prime Minister Keir Starmer—to deliver on its promises to stimulate economic growth and fund ambitious programs.

The UK economy had previously recorded a 0.7% growth rate in the first quarter of this year, outperforming other G7 nations, but April’s data signals growing challenges that may undermine the sustainability of this performance.

 

 

 

 

A Boost to U.S. Finances and a Drag on the British Economy

Dollar Falls to 3-Year Low Amid Rising Global Tensions

Dollar Falls to 3-Year Low Amid Rising Global Tensions:
The U.S. dollar fell on Thursday to its lowest level since April 2022,
weighed down by escalating concerns over trade and geopolitical tensions,
especially after U.S. President Donald Trump announced his intention to impose new tariffs soon.

 

Content
Details

 

 

 

 

Details

Trump stated he would contact his country’s trade partners within the next two weeks to set new tariff rates,
coinciding with the approaching end of a 90-day temporary truce.

The U.S. Dollar Index, which measures the greenback’s performance against a basket of six major currencies,
declined by 0.73% to 97.91, marking its lowest level in three years.

In Europe, stock markets opened lower, pressured by weak U.K. growth data and ongoing geopolitical tensions,
which reduced investor appetite for riskier assets.
The Stoxx Europe 600 Index dropped 0.4% to 549.4,
weighed down by broad sector losses, especially in the travel sector.

Germany’s DAX index fell 0.65% to 23,794, France’s CAC 40 declined 0.4% to 7,742,
while the U.K.’s FTSE 100 held steady at 8,865 after official data
confirmed that the U.K. economy contracted by 0.3% in April,
compared to expectations of a smaller 0.1% decline.

The impact of global tensions extended to the cryptocurrency market,
where significant digital assets recorded notable declines.
Bitcoin fell by 0.85% to $107,844.95, while Ethereum dropped 2.1% to $2,754.88.
Meanwhile, Ripple (XRP) also declined, losing 2.35% to $2.2408.

 

Dollar Falls to 3-Year Low Amid Rising Global Tensions

Tech Stocks Weigh on Wall Street Despite Easing Inflation

Tech Stocks Weigh on Wall Street Despite Easing Inflation: U.S. stock indices declined after a three-day winning streak,
weighed down by a drop in major technology stocks.
Apple led the losses with a nearly 2% decline, while Tesla shares remained flat,
primarily after rising almost 3% in the previous session.
Meanwhile, Oracle shares surged in after-hours trading following stronger-than-expected earnings.

This pullback came after a sharp rally that brought the S&P 500 to all-time highs.
Lower-than-expected May U.S. inflation data bolstered expectations of a potential Federal Reserve interest rate cut.

 

Content

Strong Performance in Bonds and the Dollar

Cooling Inflation

Market Optimism with Caution

Tariffs Under Scrutiny

Focus on the Fed Meeting

Rate Cut Expectations Grow

 

 

 

 

Strong Performance in Bonds and the Dollar Hits Lows Not Seen Since 2023

U.S. Treasuries rose in parallel after a successful $39 billion auction of 10-year bonds.
Short-term bonds led the rally, with 2-year yields falling below 4%.
Meanwhile, the U.S. dollar fell to its lowest level since 2023,
boosting the performance of rival currencies and gold.

 

Cooling Inflation Amid a Developing U.S.-China Trade Deal

May inflation data showed a slowdown in core inflation,
indicating that many companies still avoid passing on tariff-related costs to consumers.

In this context, President Donald Trump announced the completion of a trade framework with China,
including Beijing’s commitment to deliver rare earth minerals and magnets
In exchange for Washington allowing Chinese students to study in U.S. colleges and universities.

 

Markets Optimistic, But Seeking Clarity

Despite the recent pullback, the S&P 500 remains strong after a rebound of more than 20% from its April lows,
which nearly pushed it into bear market territory.
The rally is largely attributed to investor optimism that the U.S. administration
may ease tariffs following trade understandings with various partners.

Mark Hackett of “Nationwide” noted that the biggest challenge ahead is achieving a breakout to new record levels,
which would require stronger earnings growth.

 

 

 

 

Tariffs Under Scrutiny: Delayed Impact or Looming Threat?

Inflation data suggest consumers haven’t been significantly impacted by tariffs
yet—possibly because the harshest tariffs haven’t taken effect,
or because businesses absorbed the costs or stocked up inventory.

Ronald Temple of “Lazard” warned, “It’s too early to assume tariffs won’t affect inflation.”
He added that companies may soon face tough choices: raising prices, cutting costs,
or accepting lower margins. “I expect higher inflation later this year,” he said.

 

All Eyes on Jerome Powell and the Upcoming Fed Meeting

According to Brett Kenwell from eToro, the latest inflation report contains no big surprises
But shows little progress in the Consumer Price Index (CPI).
He advised investors to closely monitor Fed Chair Jerome Powell’s press conference next week.

“Powell is walking a tightrope with monetary policy,” he said,
“managing things cautiously without revealing intentions. But markets are craving more clarity.”

In the same context, Trump repeated his call for the Fed to cut rates by a whole percentage point,
writing on “Truth Social”: “We would pay much less on our debt. Very important!!!”

 

Markets Anticipate Rate Cuts

Market activity indicates that traders expect two rate cuts from the Federal Reserve
by the end of 2025. September rate cut bets have risen to around 75%.

 

Tech Stocks Weigh on Wall Street Despite Easing Inflation

Gold Surpasses the Euro to Rise as a Global Reserve Asset

Gold Surpasses the Euro to Rise as a Global Reserve Asset Amid Geopolitical Turmoil

The world witnessed a significant shift in the global reserve asset landscape by the end of 2024,
as gold overtook the euro to become the second-largest asset held in central banks’ reserves.
This move was driven by rising prices and increasing strategic demand amid growing global risks.

 

Contents

 

 

 

 

Gold

Demand-Driven Rise and Policy Shifts

According to the European Central Bank (ECB), gold accounted for approximately 20% of global foreign reserves by the end of 2024,
compared to 16% for the euro based on market prices.
Meanwhile, the U.S. dollar maintained its lead, although its share dropped to 46%.
This strategic shift was primarily fueled by unprecedented purchases from central banks,
with annual average purchases exceeding 1,000 tonnes over the past three years—double the pace seen before 2022.

This buying momentum came as a direct response to geopolitical developments,
particularly the freezing of Russian reserves by Western countries following the invasion of Ukraine. Consequently,
many countries reduced their exposure to the Western financial system and sought value-preserving assets less vulnerable to sanctions.
The ECB noted that the historical negative correlation between gold prices and real yields collapsed in 2022,
as central banks prioritized hedging against geopolitical risks over high interest rates.

 

Geopolitical Tensions and Global Trade Push Prices Higher

Gold extended its gains, supported by heightened tensions in the Middle East and growing trade concerns between the United States and its partners.
Prices rose by 0.6%, nearing $3,373 per ounce, also benefiting from a weaker dollar.
These sharp moves followed aggressive remarks from U.S. President Donald Trump about reimposing tariffs and threats from Iran to strike American bases if nuclear talks failed.

In this volatile environment, gold emerged as the top safe haven for investors,
particularly after the U.S. ordered the evacuation of some embassy staff from Baghdad, Bahrain, and Kuwait.
Meanwhile, oil’s gains were pared despite an initial surge,
with Brent crude dropping to around $69 per barrel amid demand concerns linked to trade tensions.

 

Oil

Between Geopolitical Threats and Economic Volatility

Oil prices experienced sharp volatility amid escalating tensions in the Middle East.
Brent crude approached $69 per barrel after a daily spike of over 4%, marking its largest gain since last October.
West Texas Intermediate (WTI) also rose by 0.6% to $68.57 per barrel.

Despite the short-term rise, Brent has declined nearly 7% since the beginning of 2025
due to fears of slowing global demand amid a heated trade war between Washington and Beijing,
along with uncertainty surrounding U.S. tariff policies.
These fluctuations come at a time when the Middle East supplies about one-third of the world’s oil,
making any regional conflict instantly impactful on global markets.

Additionally, data showed a sharper-than-expected drop in U.S. crude inventories,
as refineries across the country operated at full capacity to meet summer demand,
reaching their highest processing levels since December 2019.

 

Conclusion

The shifting dynamics of global economics and politics are reshaping the priorities of central banks.
With rising tensions, gold is once again taking center stage as a strategic store of value,
at a time when the traditional global financial system appears to be losing some of its credibility.
In contrast, oil remains caught in a delicate balance between geopolitical threats and economic volatility,
making it a key variable in the global market equation in the months to come.

 

 

 

Gold Surpasses the Euro to Rise as a Global Reserve Asset Amid Geopolitical Turmoil

Wall Street Extends Gains on Trade Talk Optimism Gold Rises

Wall Street Extends Gains on Trade Talk Optimism Gold Rises Amid Deal Uncertainty

Wall Street continues its upward trend supported by trade optimism,
while gold climbs as uncertainty lingers over a final agreement between Washington and Beijing.

 

Contents

 

 

 

 

Market Indices

U.S. stock indices continued to gain for the third consecutive session, supported by investor optimism regarding progress in trade negotiations between Washington and Beijing, alongside strong performance in the technology and artificial intelligence sectors.

The Dow Jones Industrial Average closed up by 105 points, reaching 42,866.87, an increase of 0.25%.
The
S&P 500 rose 0.55% to 6,038.81, while the Nasdaq gained 0.63%, ending the session at 19,714.99.

This positive momentum coincided with the second day of trade negotiations in London,
where U.S. Commerce Secretary
Howard Lutnick expressed optimism,
stating that “the talks are going very well” and noting the possibility of extending discussions through Wednesday if necessary.

Previously, the United States and China had agreed on a temporary reduction in tariffs,
which was seen as a step toward breaking the deadlock in trade relations—especially after President Trump’s announcement of plans for new tariffs.

 

 

Financial Markets

Since the beginning of June, markets have witnessed a strong rally, driven by robust corporate earnings—particularly in the technology and AI sectors,
which are experiencing an unprecedented boom fueled by a stream of announcements on advanced artificial intelligence applications.

Meanwhile, gold rose by 0.5% during Wednesday’s trading,
with the
spot price reaching $3,337.99 per ounce, and U.S. futures hitting $3,359.20 per ounce.

This increase came amid lingering uncertainty surrounding a final deal between Presidents Trump and Xi Jinping,
despite negotiating teams announcing the development of a “framework” aimed at restoring the trade truce and removing restrictions on rare earth exports.

 

 

 

Wall Street Extends Gains on Trade Talk Optimism Gold Rises Amid Deal Uncertainty

Musk-Trump Tensions & Lagarde Warnings Jolt Global Markets

Musk-Trump Tensions & Lagarde Warnings Jolt Global Markets: The global economic and political landscape witnessed
Notable turbulence on June 11.
Elon Musk publicly apologized to U.S. President Donald Trump following
a heated dispute rattling stock markets.
Meanwhile, Christine Lagarde warned of rising trade protectionism that could undermine global growth.
The following report highlights the key developments and their potential economic implications.

 

Contents:
Musk Apologizes to Trump

Lagarde Warns of Rising Protectionism

 

 

 

 

Musk Apologizes to Trump After Major Dispute Threatens His Businesses: “I Crossed the Line

Following a loud public fallout, billionaire Elon Musk regretted
his comments toward President Donald Trump in a surprising turn of events.
The tensions, which worried investors and sent Tesla shares tumbling,
led Musk to post on his X platform: “I regret some of my posts about President Trump last week… They crossed the line.”

The dispute erupted after Musk voiced opposition to a tax-cut bill backed by Trump,
triggering public tension between the two.
The situation escalated when Trump hinted at possibly terminating government contracts with Musk’s companies
a potential blow to SpaceX, a key pillar of Musk’s business empire.

Markets reacted swiftly to the drama, with Tesla’s stock plunging 14%,
wiping out over $150 billion in market value in a single session.
It marked Tesla’s worst week in over a year and the
weakest performance among the so-called “Magnificent Seven” tech giants.

The conflict deepened when Musk claimed credit for Trump’s electoral
success and voiced support for his impeachment, remarks that Trump considered a red line.

 

 

 

 

Lagarde Warns of Rising Trade Protectionism: Tariffs Undermine Global Growth

In a notable warning from Beijing, European Central Bank President Christine Lagarde
urged countries to rethink their trade policies, stressing that rising protectionism,
such as tariffs and trade restrictions,
exacerbate rather than solve economic imbalances and pose serious risks to global growth.

During her visit to the Chinese capital on Wednesday,
Lagarde emphasized that such measures could result in mutual economic harm and weaken the world’s ability to recover.
Reuters reported on her remarks.

She noted that government interventions aimed at boosting domestic production,
particularly through large-scale subsidies like those seen in China, have surged significantly.
However, she clarified that this trend is not unique to China and is also observed in many emerging markets.

Lagarde also pointed to the United States’ expansionary fiscal policies
as a contributor to global economic imbalance,
noting that increased public spending has significantly raised its share of global demand in recent years.

She concluded her remarks by calling on countries to take collective responsibility
in addressing these structural distortions through policy reform,
rather than engaging in escalating trade barriers and retaliatory measures.

 

Musk-Trump Tensions & Lagarde Warnings Jolt Global Markets

Commission-Free Stock Trading with Evest: A Trusted Platform with Professional Services

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Topics

Why Trade Stocks with Evest

How to Start Trading Stocks on Evest

Who Can Benefit from Evest

Additional Features

 

 

 

 

 

 

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Commission-Free Stock Trading with Evest: A Trusted Platform with Professional Services

Global Economic Shifts: Japan Struggles, UK Slows, Taiwan Surges

Global Economic Shifts: Japan Struggles, UK Slows, Taiwan Surges:
The global economic landscape is witnessing diverging developments across Asia and Europe,
reflecting the challenges of monetary policy, labor market weaknesses, and the rise of advanced tech companies.

In Japan, the central bank governor pointed to limited options for interest rate cuts despite slowing inflation,
Sending the yen lower.
Meanwhile, the United Kingdom recorded its weakest labor market performance
since the 2020 pandemic amid wage growth deceleration.
In contrast, Taiwan offered a more optimistic picture,
Despite a month-on-month dip, TSMC reported strong annual revenue growth driven by rising chip demand.

 

Contents
Bank of Japan Governor
UK Labor Market Deterioration
Taiwan Semiconductor Highlights

 

 

Bank of Japan Governor: Limited Room for Rate Cuts, Yen Declines

Bank of Japan Governor Kazuo Ueda told the Japanese parliament today
The central bank’s ability to support the economy through interest rate cuts is now limited.
Especially if economic activity or prices face significant downside pressures.

He noted that the short-term interest rate remains at 0.5%, while core inflation remains below the 2% target.
Ueda added that the bank will keep real interest rates in negative territory
to push inflation toward the 2% target and maintain stability there.

He emphasized that any move to raise rates would require
strong confidence that core inflation is approaching or within the target range.

The yen weakened following his comments, with the dollar rising from around 144.60 yen to just below 145,
signaling expectations that Japan’s accommodative monetary policy will remain in place.

 

UK Labor Market Deteriorates: Sharpest Employment Drop Since 2020

Data released Tuesday by the UK’s Office for National Statistics revealed a steep decline in employment during May
The most significant monthly drop since the start of the COVID-19 pandemic in May 2020,
highlighting growing pressures in the British labor market.

The number of payroll employees fell by 109,000, significantly worse than the expected 20,000 decline.

Wage growth, excluding bonuses, slowed to 5.2%, the lowest in seven months,
falling short of expectations at 5.3%.
Private sector wage growth, a key metric the Bank of England monitored, dropped from 5.5% to 5.1%.

The unemployment rate rose to 4.6%, the highest since summer 2021.

 

 

 

 

Taiwan’s TSMC Posts Nearly 40% YoY Revenue Surge in May Despite Monthly Declines.

Taiwan Semiconductor Manufacturing Company (TSMC) reported robust annual revenue growth in May,
with a 39.6% year-on-year increase.
This reflects continued strong demand for chips despite a slight monthly decline.

According to the company’s monthly report released Tuesday,
TSMC recorded net revenues of 320.5 billion New Taiwan dollars (approximately USD 10.7 billion) in May,
representing an 8.3% drop compared to April.

The company noted that total revenue for the first five months of 2025 reached approximately NT$1.5 trillion,
marking a 42.6% increase from the same period last year.

This performance is attributed to sustained demand for semiconductors used in AI,
communications, and advanced electronics,
further cementing TSMC’s role as a critical supplier in global supply chains.

 

Global Economic Shifts: Japan Struggles, UK Slows, Taiwan Surges

A Software Transformation in Apple’s Ecosystem

A Software Transformation in Apple’s Ecosystem: Integrating Apple Intelligence and Expanding Partnership with OpenAI
In a notable technological shift,
Apple has announced deep integration of artificial intelligence technologies across its operating systems,
reinforcing its partnership with OpenAI to deliver a smarter and more interactive user experience.

 

 

Contents
Artificial Intelligence
Market Performance

 

 

Artificial Intelligence

New AI-Powered Features Across Operating Systems
A host of smart features will be rolled out as part of the upcoming updates to iOS 26, macOS 26, iPadOS 26, and visionOS 26, including:

Real-time Translation for Calls and Messages: Support for conversations across different languages within Phone and FaceTime apps,
with spoken and on-screen translations in real time.
On-Screen Content Analysis: The Visual Intelligence feature will allow users to request instant information from ChatGPT or Google based on what appears on their screen.
AI-Powered Fitness Assistant: A motivational voice generated by AI will accompany workouts on Apple Watch,
inspired by Apple Fitness+ coaches.
Emoji Combination Tool: A new feature enabling users to combine emojis into customized icons using Image Playground and ChatGPT capabilities.
Smart Suggestions in Messages: AI will propose features like polls in group chats and allow for prompt-based custom backgrounds.

Enhanced Wallet Capabilities and Developer Tools
Apple has introduced upgrades to its Wallet app, which can now track shipping and order details directly from email receipts.
Developers will also gain access to Apple Intelligence APIs,
enabling offline AI features like natural language search and advanced Shortcuts integrations without relying on cloud computation.

 

“Liquid Glass” UI and Design Overhaul
One of the major announcements was the new Liquid Glass user interface,
which Apple described as the most extensive design revamp in its history.
This interface will be available across all platforms,
along with a naming convention shift from version numbers to year-based identifiers, such as iOS 26 and watchOS 26.

Market Performance

 

Competitive Pressures
Despite the strength of the announcements, Apple’s keynote failed to impress investors, with shares falling 1.9% during the event.
The stock has already declined 19% year-to-date, largely due to delays in AI development compared to other Silicon Valley giants.

Bloomberg had previously reported on these updates,
noting that Apple’s major AI reveal might be postponed until the 2026 WWDC,
when broader and more advanced capabilities are expected.

 

Apple Watch and Mac Move Toward AI
Apple also unveiled a new AI-based personal trainer feature for the Apple Watch called Buddy,
aimed at motivating users to stay active. On the Mac front,
the new macOS 26 Tahoe includes a customizable transparent menu bar and built-in iPhone Phone app integration.

 

External Challenges and Production Shifts
Facing rising tariff pressures, Apple has moved production of U.S.-bound iPhones to India.
While this shift may offset some costs, the company is likely to raise prices.
As usual, new device announcements are expected in September.

 

 

 

A Software Transformation in Apple’s Ecosystem: Integrating Apple Intelligence and Expanding Partnership with OpenAI

Global Markets Improve Amid Trade Optimism and Inflation

Global Markets Improve Amid Trade Optimism and Inflation Watch:
Global markets posted marginal gains this week, fueled by growing optimism around trade talks
between the United States and China,
at a time when investors closely monitor U.S. inflation data and developments in Federal Reserve policy.
Global Markets Improve Amid Trade Optimism and Inflation,
as investors continue to respond to policy signals and trade headlines.
The sentiment remains cautiously optimistic,
supported by expectations of moderated inflation and constructive global negotiations.

 

Content

U.S. Stocks Edge Higher

Asian Markets

Trade Talks

Markets Move

Strategic Optimism

Warnings of Volatility

Inflation in Focus

Strong Gains

 

 

 

U.S. Stocks Edge Higher… S&P 500 Near Record High

On Wall Street, the S&P 500 rose slightly on Monday, remaining within 2% of its all-time high recorded in February.
The gains came amid hopes of a potential trade deal between Washington and Beijing.

Tesla shares jumped by 4.5% following remarks from President Donald Trump.
Trump expressed his willingness to end his dispute with Elon Musk
and reaffirmed support for the Starlink service at the White House.
In contrast, Apple shares dropped over 1% after its annual developer conference
Failed to deliver major announcements on artificial intelligence.

 

Positive Sentiment Spreads to Asian Markets

Optimism extended to Asian markets, where a key regional index rose 0.4%.
Hong Kong and China stocks traded within a tight range, while U.S. futures climbed during the Asian session.

Trade data showed that Chinese exports to the U.S. posted their steepest drop in over five years,
highlighting the continued impact of tariffs.
Nevertheless, the Chinese equity index in Hong Kong entered
bull market territory after gaining more than 20% from recent lows.

 

Trade Talks: “Productive” and a Pivotal Opportunity

U.S. Commerce Secretary Howard Lutnick described the ongoing talks with China as “productive.”
while Treasury Secretary Scott Bisent called them “good.”
President Trump stated that progress was being made despite challenges and that he was receiving “only good reports.”

Talks will resume Tuesday morning in London to ease tensions around technology exports and rare earth materials.
Meanwhile, China’s official newspaper, the People’s Daily,
called the negotiations a “pivotal opportunity to resolve disputes through equal dialogue.”

According to Hebei Chen of Vantage Global Prime, markets appear to be pricing in a “full success” scenario,
suggesting that even a non-binding initial agreement might be enough to keep Asian equities on an upward path.

 

Markets Move on Tariff Delay and Inflation Expectations

Richard Saperstein of Treasury Partners noted that delaying the imposition of tariffs helped calm markets,
adding that investors remain highly sensitive to headlines related to the trade situation.

At the same time, markets await key U.S. inflation data on Wednesday,
with the Federal Reserve entering its media blackout ahead of the June 18 rate decision.
Takuro Ogihara from Asset Management One emphasized that any agreement
between the U.S. and China would significantly boost the global economy.

 

 

 

Strategic Optimism on Wall Street

Morgan Stanley and Goldman Sachs experts expressed confidence that the resilient U.S. economy would
help dampen potential volatility over the summer.
Michael Wilson of Morgan Stanley reaffirmed his 12-month target of 6,500 points for the S&P 500,
which closed Monday at 6,005.88.

Firms like J.P. Morgan and Citigroup also raised their year-end targets, citing fading trade war risks.
David Kostin of Goldman Sachs said recent market behavior indicates optimistic growth pricing.

 

Warnings of Volatility… But Momentum Remains

Ulrike Hoffmann-Burchardi of UBS warned that market volatility remains possible despite the upbeat tone.
However, it should not deter investors from allocating capital,
especially with interest rates and cash yields expected to decline.

Analysts at Deutsche Bank, including Parag Thatte,
pointed out that the market has bounced back from a recent selloff in record time,
marking the shortest “volatility shock” in its history.
Lisa Shalett of Morgan Stanley Wealth Management attributed the rally to “fear, capitulation,
and unbalanced positioning,” yet cautioned that the market lacks a compelling narrative.

 

Inflation in Focus… Equity Risk Premium Still Low

This week’s inflation reading is seen as pivotal for market direction.
Sam Stovall of CFRA states that if the S&P 500 surpasses its February peak,
it will mark the 25th post-WWII correction recovery, with an average 10% gain over the following 127 days.

Meanwhile, Bloomberg Intelligence analysts Gina Martin Adams and Michael Casper observed that the equity risk premium,
the gap between stock earnings yield and 10-year Treasury yields,
remains negative and below the long-term average.
While that typically signals weaker returns, history shows it doesn’t guarantee poor performance,
as seen in two prior periods (1968–1973 and 1980–2002), when markets still posted solid gains.

 

 

Platinum, Silver, and Bitcoin See Strong Gains

With the U.S. dollar index steady, attention shifted to alternative assets.
Platinum continued its rally amid signs of supply tightness.
Silver surged to a 13-year high last week,
and Bitcoin rose for the fifth straight session,
reflecting growing appetite for alternative assets in an uncertain economic climate.

 

Global Markets Improve Amid Trade Optimism and Inflation