It was a long discussion with some “tarrified” investors. The conversation zig-zagged across the usual suspects – markets, macro, and moments of comic relief. Several key themes dominated the session, reflecting the push and pull that defines today’s investing landscape.
After a historic six-day sprint that had the widely-watched S&P 500 surging with impressive momentum, the index finally took a breather. The recent pullback looked more like a healthy and much-needed consolidation.
Meanwhile, in the wild world of crypto, Bitcoin is showing signs of life again. Prices are climbing, suggesting that risk appetite is quietly sneaking back into the room. The earlier slump triggered by a broader tariff-induced market tantrum was less about digital assets and more about a general “risk-off” mood.
The Fed held rates steady and no surprises there. Jerome Powell, as usual, performed his balancing act with precision, delivering a message that was part dove, part hawk, and all nuance. Markets were left to decode his words like a riddle from a financial oracle.
Has Trump learned his lesson well? Over the weekend, senior US and Chinese officials met in Geneva. Real progress was reportedly made toward a preliminary trade agreement. We will keep our fingers crossed and our expectations tempered.
After a strong run, a period of correction or sideways movement would not be a surprise. Gold is not going anywhere, but it might just sit out the next dance or two to catch its breath. Gold is not for those seeking short-term speculation.
Beware that the US dollar could go down again even in a long-term bullish trend (yes you heard it right). Given what happened in Taiwan earlier this month, it is hardly shocking that the Trump administration reportedly nudged other countries to smile and accept a stronger currency as part of a trade deal.
What? The decline in the greenback since the start of this year is an important part of the debate about diminished American exceptionalism. The US dollar weakness is not the same as losing its status as the world’s reserve currency.
Right now, the markets feel like it is stuck in a standoff. Bulls are not fully in control. Bears are not either. The biggest enemy? Complacency. When everyone is calm and the headlines are quiet, that is when risks tend to hide in plain sight. This is the time for balance and watching the horizon carefully.