Wall Street canceled the Sell in May and advances challenging. Believe or not, already returned to the February levels. On a frantic trip, the S&P 500 climbed 2% in 2025. Nothing, an observer would say with the naked eye. Is that the winding trace of its hidden route the turns of the roller coaster. Incredible, I would say a connoisseur. First the index touched the sky with his hands and stamped a record of records until February 20. Transcartón, rushed with Donald Trump and the unleashed fever of tariffs. In April, the day of liberation triggered an advance of Sell in May Furioso, and bordered the confines of the Bear market, almost 20% below. But he bounced when the White House bounced with reciprocal tariffs and had to file them. The passage of bulls – with retail investors in front – ended up imposing as the president shrunk his claims and hurried the first commercial agreements. All lung.
In his own way, invoking a historical victory, Trump folded his hostile flags in just a week. He rapid quickly with Great Britain and China, respectively, the most trivial agreement as possible and the only decisive of its bilateral confrontation strategy. Beijing, to top it off, then violated his promises, as the president himself accused. But the deal did not fall, it is still standing. Xi Jinping attended Washington’s call to the phone. And corrected his deliberate mischief. Who has the pan for the handle? It was begged, raised the restriction to export rare minerals, and the three great automotive of the US made their soul to the body.
There is no mood to make war. Talking is better. Perhaps the same time is lost, but no damage is caused. Xi invited Trump to visit his house (and the tycoon returned the kindness on the spot). It will already invent another conflict to get attention (there is already the National Guard deployed in Los Angeles without the consent of Governor Newsom). Or Elon Musk will take care of. XI knows that Trump needs to show that he doesn’t always wrinkle. Thus, honor will not lose it. Nothing like going together.
Wall Street concentrated in the most important. The US created 139 thousand jobs in May, all of them (and a thousand more) in the private sector. They exceed what is expected (and they are much more than was feared). The S&P 500 thus bought the 6,000 -point ticket. He saw the data and was convinced: there is no recession. The contraction in services detected the ISM PMI report is opposed to the expansive reading of the Global S&P PMI report. It is a gradual deceleration signal (such as the sustained rebound in the orders for unemployment subsidies). The bag thus confirms the intuition that guides it from April 9. And it goes for more. It is just 2.3% below the absolute maximums. Will you be encouraged to test them? And why not?
May inflation – which will be known this week – is the warden more by hand. Until the present the inflation reports have been excellent, he acknowledges Austan Goolsbeeof the Chicago Fed. The tariffs did not make a dent, even in April with the Liberation Festival. Inflationary pressures flutter, a long time ago, in the soft data and anecdotal comments. But they do not emerge at the retail counter. And wholesale prices, without changes in March, fell 0.5% in April. It is not a miracle. The abundant preventive rabby of the first trimester – and a less brious consumption expense – are containment fences.
The bet is philositable: that consumer prices repeat the measurement of the previous month (0.2%), or even lower a tenth, so that the Fed can also enter the scene. Not in a forced way – as Trump intends with his grotesque posts – but natural. Not at the next meeting of 17 and 18. Nor in July. But in considerations to September. The very sober Patrick Harkerwho retires at the end of the month of the Fed of Philadelphia command, recalled it on Friday. “It is still possible for the Fed to cut the rates once before the end of the year,” he said. The governor Chris Wallerpreceded by his fame as a hawk as for the suspicion of ambition Jay PowellIt was more explicit. If the tariffs are the ones that are already, their pressure on the prices will be limited and transitory, and the casualties of fees could be the two that are suggested on the point map.
However, with a tamed Trump, they are no longer the tariffs, it is the fiscal policy that forces the Central Bank to see and wait. The tax reduction package that the administration negotiates in the Senate is an increase in the deficit of 2.4 billion dollars in the next ten years, according to the estimate of the Congress Budget Office. And while its fire power was reduced (with the modifications that the lower house introduced) is a Damocles sword about the stability that the Fed must take care of. This is where the spectacular fracture of the relationship between Elon Musk and the president size. What could not with the chainsaw inside the government may get it from the sidewalk. The “great and beautiful” tax law that Trump seeks is an “abomination” for Musk, and more now with the blood in the eye. Any Republican who wants to be consistent with his recent fiscal preaching will find in X a formidable platform to make known. This did not enter the previous calculations, and the calculations to gather the necessary votes were already very tight.
It is early to argue that the tax law that was not yet born is dead, but it is very tempting. The bag is anticipated. He puts a spicy in the 6 thousand points aspiring for long rates to ensure it soon. Because then the Fed can relax and release monetary policy with the dissatisfaction of last year when Biden said goodbye. The S&P 500 thus points to records. Then, if the profitability of the companies resists as much as the “Guidance” they communicate, will try to fly higher, to the level of the optimistic forecasts at the beginning of the year. There is no hurry. Long rates should wrinkle first. And they haven’t done it yet.
Source: Ambito

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