Good morning. Happy Friday. Happy Unemployment Numbers Day.
The Asian/Pacific markets leaned to the upside. Japan and China were mostly up. Others were up or down small amounts. Europe, Africa and the Middle East are very quiet. Denmark is up, and Poland is down. Otherwise there are no notable movers. Futures in the States point to moderate gap up open for the cash market.
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The dollar is up. Oil and copper are down. Gold and silver are up. Bonds are down. Bitcoin is up.
Stories/News from Seeking Alpha…
Taking the gloves off
Marking the EV maker’s worst session on record, Tesla (TSLA) crashed 14.3% to $284.70/share on Thursday to erase $152B in market cap. The stock rebounded 5% overnight, but the price is near the same level at which it was trading around the presidential election on Nov. 5, 2024.
Translation: Tesla has now surrendered most of the gains garnered since the so-called “Trump bump.” And for good reason. CEO Elon Musk and President Trump have had a very bad breakup, with escalating rhetoric continuing to spill out into the open.
Things have reportedly gone sour in the West Wing for a while, where Musk served as the head of the newly created Department of Government Efficiency. His agenda at DOGE oftentimes clashed with the administration’s efforts, with Musk getting into fights with Scott Bessent, Marco Rubio, Sean Duffy and Peter Navarro. Musk was also approaching the end of his term as special advisor with a need to spend more time at Tesla (TSLA) and SpaceX (SPACE), at the same time that Trump was pushing his “Big Beautiful Bill” through Congress – to the dismay of Elon’s mission to bring financial accountability to the government.
That wasn’t all. While the “BBB” included tax incentives for the oil and gas industry, it slashed EV credits and imposed a fee on EV owners in place of the federal gas tax. That appeared to be the final straw for Musk (along with missing out on his preferred NASA pick), after donating millions of dollars to Trump’s election campaign, helping shore up the voter base, and standing by his side while seeing his companies spiral during his time at the White House. On the other side of the Resolute Desk, Trump was committed to DOGE, but had to balance an entire administration (not just one newly created department), with an extremely narrow majority in Congress and a need to make concessions along spending lines.
Take a step back: The war of words has since escalated over X, Truth Social, and in the Oval Office. The public brawl has covered accusations that involve Jeffrey Epstein, potential termination of government contracts, and threats to decommission SpaceX vehicles. Reports suggest that White House aides have scheduled a call for today between Trump and Musk, while billionaire Bill Ackman urged the sides to “make peace for the benefit of our country,” to which Musk replied, “you’re not wrong.”
What else is happening…
Rare earths: Trump, China’s Xi agree to visit each other.
Nonfarm payrolls growth expected to continue moderating.
Walmart (WMT) expands drone delivery to five major cities.
DocuSign (DOCU) crashes after lowering FY billings guidance.
Lululemon (LULU) sees soft Q1 sales, cuts FY profit outlook.
US Steel (X)-Nippon merger seen closing by June 18 deadline.
Stablecoin issuer Circle (CRCL) surges in strong public debut.
Jack Daniel’s maker: Demand hit by GLP-1s, weed and Gen Z.
Amazon (AMZN) set to test AI humanoid robots for deliveries.
India front-loads rate cut to boost growth amid global volatility.
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Good morning. Happy Thursday.
The Asian/Pacific markets did well. China, Hong Kong, South Korea, India, New Zealand, Malaysia, Indonesia, and Thailand posted solid wins; Japan was weak. Europe, Africa and the Middle East lean to the upside. Germany, South Africa, Norway, and Israel are up; Poland is down. Futures in the States point to flat open for the cash market.
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The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up. Bitcoin is up.
Stories/News from Seeking Alpha…
Let’s-a go!
Gamers have been gearing up for today’s launch of the Nintendo Switch 2, which is likely to be in short supply due to enormous demand. That’s despite a price tag of $450 and premium game titles like Mario Kart World going for $80. The next-generation console, which will be backward-compatible, features a bigger screen and sleeker graphics, as well as ergonomic and magnetic Joy-Cons, with larger buttons and better haptics.
Backdrop: Nintendo scored a major victory with its original Switch console, which hit the market in 2017. Eight years later, the gaming giant has sold more than 150M units of the hybrid system, making the list as the third best-selling game console of all time (behind the PlayStation 2 and Nintendo DS). Any future success will be closely watched by Sony (SONY) and Microsoft (MSFT), which both released their last consoles in 2020 (the PS5 and Xbox Series X/S).
The midnight launch for the Nintendo Switch 2 took place at locations including GameStop (GME) and Best Buy (BBY), with retailers stocking additional supply for customers who weren’t able to pre-order. Even before the big event, investors have been responding to the excitement surrounding the console, with ADRs of Nintendo (OTCPK:NTDOY) soaring 43% YTD. The enthusiasm has also helped Nintendo reach a market value of close to $100B, becoming the eighth largest publicly traded company in Japan.
SA commentary: “Despite tariff challenges, Nintendo’s strategic pricing and accessory adjustments should mitigate impacts, and I expect 17M units to be sold by March 2026,” writes SA Analyst Compounding Chef. “Nintendo’s FY 2025 sales and profits dropped as Switch 1 ages, but these numbers should not be relevant in the current context,” adds Investing Group Leader Best Anchor Stocks, discussing the latest earnings released in May. “FY 2026 guidance seems conservative, but it’s normal to see margins drop initially.”
What else is happening…
Trump again urges Powell to cut rates after soft jobs data.
European auto industry next to sound alarm on rare earths.
Kimberly-Clark (KMB) nears $3.5B sale of Kleenex business.
Meta (META) eyes Hollywood deals for upcoming VR headset.
Russia will respond to drone attack. Can Congress coerce Putin?
Reddit (RDDT) files lawsuit against Anthropic over AI training.
Wells Fargo (WFC) asset cap lifted by Fed after seven years.
Warner Bros. Discovery (WBD) shareholders reject CEO’s pay.
FAA said to maintain production cap on Boeing (BA) 737 MAX.
SA Roundtable: What are the robotics stocks to watch in 2025?
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Good morning. Happy Wednesday.
The Asian/Pacific markets did great. Japan, China, Hong Kong, South Korea, Taiwan, Australia, and New Zealand led while Thailand and the Philippines were weak. Europe, Africa and the Middle East are mostly up. Denmark, Poland, Turkey, Finland, and Saudi Arabia are up more than 1%; Austria is down. Futures in the States point to flat-to-down open for the cash market.
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The dollar is down. Oil is down; copper is up. Gold is up; silver is down. Bonds are up. Bitcoin is down.
Stories/News from Seeking Alpha…
Critical minerals
It’s not being publicly advertised, but access to rare earths is playing an outsized role in resurgent U.S.-China trade tensions. Following last month’s détente in Geneva, it was apparently agreed that both sides would roll back retaliatory tariffs imposed since April 2, but there has been disagreement over export controls and sector-specific levies. China appears to be keeping in place a strict approvals process on rare earths that are used in everything from commercial vehicles to military equipment, while the U.S. has increased tariffs on steel and aluminum to 50%.
Quote: “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” President Trump wrote early this morning on Truth Social. It comes just days after another post that highlighted the escalating tensions. “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”
Carmakers have warned of dire consequences if things don’t change quickly, with a trade group representing General Motors (GM), Toyota (TM) and other major producers recently sending a letter to the White House. “Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components,” according to the Alliance for Automotive Innovation. On the military side, rare earth magnets are included in the production of fighter jets and aerospace components like missile guidance systems, impacting firms like Raytheon (RTX) and Lockheed Martin (LMT).
What are rare earths? Despite the name, there are deposits of them all over the world (some of them are even thousands of times more abundant than gold). The term refers to a group of 17 elements that are called “rare” since it is unusual to find them in pure form or in concentrated quantities. As a result, the minerals are difficult to mine and refine profitably, while byproducts like toxic wastewater and radioactive residues have to be addressed during extraction and processing.
Outlook: China undercut world prices for rare earths in the 1990s, resulting in heavy barriers to entry and putting pressure on upcoming challengers. Hopes of U.S. companies looking to break into the industry have also been dashed in the past due to strict environmental regulations, leading China to gain a 90% share of the world’s refining capacity. It could take 5-10 years for any serious American production to get off the ground, and it’s another reason why the Trump administration has made rare earths a prominent theme during negotiations with Ukraine and its play for Greenland.
What else is happening…
Nvidia (NVDA) reclaims crown as most valuable company.
Meta’s nuclear power deal likely cheaper than Microsoft’s.
Texas could soon mandate warning labels on Doritos.
Mastercard and PayPal team up on checkout flexibility.
AMC theaters to show more ads before playing movies.
Elon Musk bashes Trump’s ‘One Big, Beautiful Bill.’
SpaceX revenue forecast; Rocket Lab’s (RKLB) next launch.
Chinese startup unveils text-to-video to take on OpenAI.
South Korea’s opposition candidate wins presidential election.
NATO wants European members to ramp up air defenses.
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Good morning. Happy Tuesday.
The Asian/Pacific markets leaned to the upside. Hong Kong, Taiwan, Australia, and the Philippines did well. India and New Zealand were weak. Europe, Africa and the Middle East are currently mixed and quiet. Turkey, the UAE, and Portugal are up; Poland, Hungary, Spain, and Austria are down. Futures in the States point to down open for the cash market.
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The dollar is up. Oil is up; copper is down. Gold and silver are down. Bonds are up. Bitcoin is down.
Stories/News from Seeking Alpha…
Just another revision?
The OECD is out with some new growth forecasts, and they’re not looking pretty. Estimates for the global economy and the U.S. have been cut further due to “substantial increases in trade barriers, tighter financial conditions, weakened business and consumer confidence.” Inflation is also projected to be higher through 2026, which will likely prevent Fed rate cuts this year, while public debt levels will need to be addressed and put on a sustainable path.
By the numbers: U.S. growth will slow sharply, dropping from 2.8% last year to just 1.6% in 2025 and 1.5% in 2026. That’s also down from the 2.2% expansion for 2025 predicted before President Trump unveiled “Liberation Day” tariffs in early April. 2025 forecasts for other OECD countries were also scaled back, including China, Canada and Mexico, compared with the past interim outlook.
U.S. pushes countries for best trade offers by Wednesday as tariff deadline approaches
IMF slashes global growth forecasts, warns of sharp slowdown from tariffs
U.S. economic outlook faces ‘unusually elevated’ uncertainty: FOMC minutes
“Weakened economic prospects will be felt around the world, with almost no exception,” the OECD declared, adding that the forecasts are “based on the assumption that tariff rates as of mid-May are sustained.” In order to revive growth, the Paris-based organization is recommending the lowering of trade barriers, raising productivity and cutting regulatory costs. It also proposed increasing public investment in energy, digital and critical infrastructures, as well as speeding up construction permits and reforms to spur housing supply.
Track record: The accuracy of OECD outlooks has varied in recent years, with forecasts that are revised fairly often (the latest is the second revision in the past three months). Sudden and severe economic impacts like COVID and broad tariffs can influence projections, as well as the aftermath of those events, like the economic rebound in 2021 and the economic resilience seen in 2023 despite the Federal Reserve’s hiking cycle. When there aren’t as many volatile scenarios or shocks, OECD forecasts have been more in line with actual growth.
What else is happening…
WSB survey results: U.S.-China trade truce may unravel before August.
U.S. steelmakers surge after Trump doubles steel, aluminum tariffs.
Record labels weigh licensing music to AI firms to settle legal fight.
Bond market is going to have a tough time – JPMorgan’s (JPM) Dimon.
Elon Musk’s Neuralink raises $650M; xAI plans $300M share sale.
UBER names first COO since 2019 to steer self-driving strategy.
Russia lays out terms for a ceasefire and end of its war in Ukraine.
This stock soars 48% on leasing deal with CoreWeave (CRWV).
Trump administration proposes lifting curbs on Alaska oil drilling.
South Korea election: Voters head to polls after months of instability.
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Good morning. Happy Monday.
The Asian/Pacific markets were weak or closed. Japan, Hong Kong, Taiwan, and Indonesia posted the biggest losses. Europe, Africa and the Middle East are currently mixed. Denmark, Turkey, Norway, Hungary, and the Czech Republic are up; Poland, France, and the Netherlands are down. Futures in the States point to gap down open for the cash market.
————— Audio Course: The Mindset of a Trader —————
The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down. Bitcoin is down.
Stories/News from Seeking Alpha…
More friction
Tensions are escalating between the U.S. and China, not only on the trade front, but even when it comes to defense. Over the weekend, Defense Secretary Pete Hegseth warned Asian countries of China seeking to become a “hegemonic power” in the region.
Imminent threat: “We are reorienting toward deterring aggression by Communist China,” Hegseth said on Saturday while addressing the defense summit Shangri-La Dialogue. “The threat China poses is real. And it could be imminent.” Hegseth urged Asian nations to step up defense spending because of this threat. “Beijing is credibly preparing to potentially use military force to alter the balance of power in the Indo-Pacific,” he warned, pointing to China’s actions in the South China Sea and Taiwan.
Beijing response: China’s foreign ministry rejected Hegseth’s claims, accusing him of touting a “Cold War mentality” and vilifying China. “No country in the world deserves to be called a hegemonic power other than the U.S. itself.” The ministry said Taiwan is an internal affair, adding that the U.S. must “never play with fire” on this matter. “China urges the U.S. to stop inciting conflict and confrontation in the region,” it added.
Trade war: Both the U.S. and China have accused each other of violating the temporary truce on tariffs they’d agreed upon last month. The truce will end in August, but escalating tensions fuel the risk of the deal unravelling sooner. “Any early end to the deal would hit risk assets and the dollar again,” ING analysts said. “At the same time, the tariff story took a more aggressive turn, with Washington choosing to double the 25% tariff in the steel and aluminum sectors.” Take the WSB survey.
What else is happening…
OPEC+ announces third output hike despite internal tensions.
24 clean energy projects axed, Arctic drilling curbs may be next.
Spending cuts: Trump administration targets tech contractors.
Regulators prepare to roll back capital rules for big banks.
Wall Street forecasts more weakness ahead for U.S. dollar.
SEC concerned over crypto ETFs offering staking rewards.
UnitedHealth (UNH) posts worst monthly drop since 2009.
Sanofi (SNY) to buy Blueprint Medicines (BPMC) for $9.1B.
Airlines outlook: IATA flags ‘thin buffer’ against future shocks.
Disney’s (DIS) live-action Lilo & Stitch tops box office again.
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