New absolute records in Wall Street govern. First it was the turn of Nasdaq 100, Thursday. A day later, the S&P 500 and the combined Nasdaq stamped theirs. He cessation of hostilities that President Trump imposed on Iran and Israel (after demolishing Tehran’s nuclear program), and the consequent Petroleum price collapseplus the Commercial peace with Chinathey promoted a sharp offensive with broad participation. Meanwhile, the Fed Debate in public an upcoming reduction of interest rates. If you start it at the end of July or in September, with probable repetition before it ends 2025. and thus reinforces the propensity of investors to take risks in a context where the economy cools.
Not only the actions rise, Also long bonds for the third consecutive week. The White House requires its legislators to hurry the passage of the tax reduction package by Congress. President Trump wants him on his desk on Friday. And the “vigilantes”, far from alarming, have filed their misgivings. To a large extent, by the work of the Secretary of the Treasury, Scott Besent, and his regulatory arguments (des). A cut in the demands for supplementary banking and the green light for a greater use of stablecoins (with the guarantee of treasure titles as support) is the engineering that devised to oil the absorption of an offer of rising bonds. It remains for Congress to approve it.
The brand new maximums confirm the full validity of the Bull market that was born there by October 2022. The dangers are more than obvious. But what does not kill, strengthens. AND The current rally took strength from weaknesses, at all times, since the stock market touched on April 7 because of the president’s obsession for the tariffs. That was the real day of liberation. The fear of an imminent catastrophe forced the White House to suspend for three months (until July 9) the application of reciprocal tariffs. That first reverse, put the bag forward. It was the initial step of the recovery. The key was to notice that the commercial war had touched its limit, no matter how much the dispute continues (and with Trump, the guerrillas war never ends).
Eeuu-China Agreement: The bag saw it first
The Stock Exchange anticipated the turn towards peace before even Secretary Besent agreed with China in Geneva. He did it fed by the incessant flows of the retail investor already contrary to tenacious skepticism, and the short positions, of the professionals. From there, the spectacular rise in quotes. Extraordinary complacency, he said Jamie Dimonthe JP Morgan CEO. But if the recovery was sustained and advances towards new summits it is because it also exhibited notable prescience. This week, without going any further, the arrangement with Beijing was announced for the third time. The Secretary of Commerce, Lutnick, said that the document was already signed (although it did not spread it). But legal records are not needed. The mango pan does not have the US with its control over semiconductors but Chinese hegemony in the provision of rare minerals, and the critical dependence of the industry worldwide. Xi Jinping, fortunately, does not want more frictions in commerce. And a trump thus conditioned, either. It is what the bag saw first.
In that line, this week, Besent said that A dozen other agreements will come to light before September. And The deadline of July 9 is entirely flexible. In shortUS will handle reciprocal tariffs at will. There will be occasional shootings – such as Trump’s tantrum with Canada – but the background process changed. The chimera of a war is no longer pursued but to take advantage in the last mile of the negotiation.
Wall Street Zozobró in April for the Tariff War. And instead he never feared war in Iran. Geopolitics is not theirs. That is clear. But it is no coincidence that attacks the February records only after Trump proclaimed the end of the 12 -day war, as he baptized it. The world is a polvorín, it is known. And now, thanks to him, it is a significantly less dangerous place. It is as if the Ormuz Strait had widened. That novelty invoiced her immediately.
Trump and the war: the dog dead, the rage is over
Trump is the president of the US less warm in decades. A convinced of the convenience of subtracting his country from military conflicts in the world and leading a global peace process. If he joined the war with Iran, it was precisely to end her quickly. He had to bombard his entrails with the imposing B2S to achieve what he wanted. He had to hammer the nuclear program where no one else could access to force a ceasefire. The dog dead, the rage is over. And if he did not die he will have recovering years, which, for these purposes, is the same. That says Trump, that thinks Wall Street.
Trump saw the opportunity with real estate developer. He scored the locations: Fordo, Natanz and Isfahan. He opened Pandora’s box, entrusted to his warlike superiority and brought the blow. And then closed the box with the two belligerent geniuses inside. It is the end of the story, Francis Fukuyama would say. No one has died here, and thousands will die. And with a lucidity worthy of George Bush Father, after Israel fadded to military and scientific hierarchies, leaves the Ayatolá Jamenei intact in his armchair. And he even worries about finding some occupation of civil use to his nuclear fans. It is an impeccable operation, the best that his government has done.
The signals of the economy and the trust in the Fed
Wall Street celebrates peace in commerce and in the Middle East. While it premieres records, however, The real economy multiplies the signals of weakness. The consumer, which is the backbone that holds the cycle, reduced the expense in May, and the income fell very strong. Retail sales had already declined in April. The real consumption in the first five months of the year stagnated. The Unemployment subsidies granted and in force they accumulate in rapid growth since the end of April. They are already approaching the 2 million threshold and igniting a yellow light in the labor marketthe other bastion of yesteryear. They are indications that economic deceleration may be more energetic than expected.
Wall Street ascends impassively with intrepidity. He is confident that the Fed will take over time. It discounts that the path will resume deepen the monetary Pax that began, and suspended, in the presidency of Biden. The motion of the governors Waller and Bowman is triggering the rate of rate at the end of July. I hardly win critical mass, despite Trump’s constant verbal bombardment. Because? Chairman Powell believes that tariffs will raise inflation readings of June, July and August. Neel Kashkari, from the Minneapolis Fed, revealed his inclination to weigh that information and prune the rate in September. What will happen if the weakness of the real economy is accentuated, and, just later the jump of inflation is verified? The Fed should go step by step, says Kashkari. Make a first decline and reserve the right to enter as pause. For Wall Street, and for the vibrant passage of bulls, with seeing flame the bearish bias it reaches.
Source: Ambito
