For Week Ending May 31st

MARKETS OVERVIEW

DJI: +0.98% Russell 2000: +1.01%

S&P 500: +1.19% VIX: -16.69%

Nasdaq: +0.99%

Markets Overview

-Steady week as Trump's tariffs were blocked by U.S. Court of International Trade. However, Trump insists they remain. Trumps TACO trade has also gained popularity which stands for "Trump Always Chickens Out". All of these factors helped ease traders this week as the prospect of a recession fades even further yet again. Trump has also announced an increase in the steel tariffs from 25% to 50%.

Fixed Income

• Since the introduction of the tariffs, bonds have reacted in a very volatile way. Many would say that Trump reduces tariffs when bonds signal him to. Matt Collins, PGIM Head of ETFs, says, "Bonds have not found their footing". He also describes how this is evident in long duration bonds. Many people are flocking to short duration as we await the Fed's decision on interest rates.

• In other parts of the world, Japan in particular has seen growing liquidity risk to a point where Steve Barrow, head of G-10 strategy at Standard Bank says it has been "quite extreme".

• This comes after Japan's Prime Minister compared Japan's economic troubles to Greece's. This created a major flocking from Japanese Bonds causing Japan's 30 year to hit its highest level since 1999.

• This raises a lot of concern for US investors, as volatility in the US could spark a similar story. Although there has been a major cooling in equity markets and in bond markets as well, Trump's new tax bills could add to the deficit creating more open-ended risk. It is to be noted that roughly 30 percent of US debt is owned by foreign nations with Japan owning the most at 1.1 trillion.

  
  

  

  
  

  

  SECTION by Chad Doto

• European companies are feeling the pressure in China. As growth slows and competition heats up, many are cutting costs and rethinking their investments. “The picture has deteriorated across many key metrics,” the European Union Chamber of Commerce in China reported, painting a realistic picture of the business climate. Industries like electric vehicles have become so overcrowded fueled by government subsidies that “factory capacity far outpaces demand,” leading to “fierce price wars that cut into profits.” The pressure isn’t just local, raising alarms in Europe about unfair competition. Jens Eskelund, the Chamber’s president, put it plainly: “There’s a clear perception that the benefits of the bilateral trade and investment relationship are not being distributed in an equitable manner.” Even though China is trying to boost consumer spending, the survey shows that confidence among European companies hasn’t recovered. “It is just very difficult for everyone right now in an environment of declining margins,” Eskelund said about the growing uncertainty.

  The bill's intention to stimulate economic growth through tax cuts and increased consumer spending has merit. However, the substantial increase in national debt and potential reduction in healthcare coverage raise concerns about long-term fiscal health and social equity.

  Critics argue that the benefits may not be evenly distributed, with wealthier individuals and corporations reaping more advantages. Additionally, the projected loss of healthcare coverage for millions could have adverse effects on public health and economic productivity.

  In conclusion, while the bill may offer short-term economic stimulation, the long-term implications on national debt and social welfare programs warrant careful consideration. Balancing tax reforms with fiscal responsibility and social equity is crucial to ensure sustainable economic growth.

Section by Chase Orciuch EARNINGS

Nvidia reported incredible first-quarter earnings, with revenue reaching $44.1 billion (69% increase YoY), and a reported earnings per share of $0.81, which beat the expectation of $0.76. This growth was driven primarily by a 73% Year over year surge in data center revenue to $39.1 billion. This growth was fueled by strong demand for AI infrastructure, particularly the adoption of Nvidia's Blackwell architecture. The use of artificial intelligence is only increasing, and becoming more essential in our lives overall. Jensen Huang even noted this during the earnings call, saying “Countries around the world are recognizing AI as essential infrastructure, just like electricity and the internet” with increasing use of artificial intelligence, companies like nvidia will be at the center of the transformation.

The tariffs have done a lot of damage to nvidia, as trade talks with China are still greatly affecting its value. President Donald Trump said early Friday that China had “totally violated its agreement with us”. Strong statements like this from both the US and China created more concerns that trade tensions could escalate once again.

For this upcoming week, Crowdstrike, the global cybersecurity company, is set to release their earnings after the trading day on Monday. Despite challenges of high operational costs, Crowdstrike continues to show strong growth in its business. The company's Annual Recurring Revenue (ARR) grew 33% year-over-year to reach $3.65 billion, with net new ARR of $212 million added in the quarter. Crowdstrike boasts a strong 37% year-to-date, and investors continue to show confidence in Crowdstrikes position within the cybersecurity sector.

Overall, in the past 2 weeks, the nasdaq index has experienced very noticeable gains of over 9%. Investors have increased optimism, and encouraging inflation data has led to strong performance. Uncertainty about tariffs still looms, and will still create fluctuations in certain sectors.

GDP

GDP shrank by 0.2 in the Q1 2025, largely caused by the ongoing trade deficit and disputes. Luckily, consumer spending is still strong within the nation.

Other News

• Salesforce acquires Informatica for $8 billion

Upcoming Events

Tuesday: JOLTS Job Openings

Friday: Unemployment Rate, Nonfarm Payrolls,