Wall Street Rally Hits 5 Days, Gold Sinks, ETH Builds Momentum

🔹 Markets: S&P 500 rose for the 5th straight session, +5.1% on the week. Nasdaq +7%. Dow turns positive YTD.
🔹 U.S. Data: Michigan sentiment fell to 50.8 (2022 low); inflation expectations jumped to 7.3% (1yr). Housing starts missed; import/export prices rose 0.1%.
🔹 Commodities: Gold -4% to $3,187 on risk rotation and rising yields. Crude rebounded to $62, but faces pressure from OPEC+ and Iran deal chatter.
🔹 Europe: All major indexes posted weekly gains—Ibex +3.6%, FTSE MIB +3.1%. Eurozone trade surplus at €36.8B. Italy CPI +1.9%.
🔹 Asia: Japan equities mixed on weak GDP. China signals openness to U.S. engagement. Korea warns of economic pressure.
🔹 Crypto: BTC steady near $103K on ETF flows and institutional demand. ETH >$2,500 post-Pectra upgrade; Layer 2 growth driving traction.

North America News NASDAQ Ends Lower After Meta Pullback; Dow and S&P Push Higher Major US equity indexes closed mixed on Thursday, as a sharp reversal in Meta stock dragged down the NASDAQ, even while the Dow Jones and S&P 500 continued to climb. Meta’s stock fell sharply to $643.88, down $15.48 or -2.35%, after news broke that the company would delay its flagship Llama 4 AI model. Earlier in the session, the stock had traded up by nearly $3.89 before the negative report surfaced. As Meta tumbled, the NASDAQ Composite lost steam and finished down 34.49 points (-0.18%) at 19,112.32. It had been up as much as 60.41 points intraday before the selloff. Meanwhile: Weekly Performance (so far): Investors will now look ahead to Friday’s close to gauge weekly strength across the board, with tech volatility likely to stay elevated as more firms report AI developments and earnings. Atlanta Fed GDPNow Tracker Ticks Higher for Q2 The Atlanta Fed’s GDPNow model revised its Q2 2025 growth estimate to 2.5%, up from the previous 2.3%. The upward adjustment reflects firmer economic data and moderate resilience in both business activity and consumer spending, despite ongoing trade uncertainty and monetary tightening. In their own words: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.5 percent on May 15, up from 2.3 percent on May 8. After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, and the Federal Reserve Board of Governors, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 3.3 percent and 1.2 percent, respectively, to 3.7 percent and 1.5 percent. US Producer Prices Post Surprise Drop in April April PPI came in +2.4% y/y, just below the +2.5% consensus. But the month-on-month figures showed a shock drop of -0.5%, far weaker than the +0.2% expectation. Core details: Notably: This sharp pullback suggests pipeline inflation pressures are easing—at least for now. US Retail Sales Advance in April April’s retail sales rose by +0.1%, beating the flat consensus. The prior month saw a strong +1.5% gain. Details: Category movers: While the headline surprised slightly on the upside, the control group decline suggests core consumption is losing momentum. U.S. Jobless Claims Stable at 229K Initial jobless claims in the U.S. matched expectations at 229,000 for the latest week. The prior reading was revised up to match at 229,000. This data shows labor market conditions remain tight but are beginning to normalize from ultra-low levels seen earlier this year. 30-Year Mortgage Rates Tick Higher as New Builds Gain Appeal Freddie Mac’s 30-year mortgage rate rose to 6.81%, up slightly from 6.76% the previous week. Rates have held in a narrow range between 6.7% and 6.9% for months, maintaining elevated borrowing costs. Housing market snapshot: Despite high rates, builders are gaining traction by cutting prices and offering incentives, while tight inventory in the resale market continues to prop up home values. US Homebuilder Sentiment Drops Sharply in May The NAHB housing market index for May dropped to 34, well below the expected 40 and down from 40 in April. Sentiment among US homebuilders is deteriorating as higher borrowing costs and affordability challenges weigh on new demand. Details: This marks the latest sign that persistent mortgage rate pressure is souring the outlook in the residential construction sector. US Business Inventories Lag Forecasts in March Business inventories rose just 0.1% in March, slightly below the 0.2% forecast and a slowdown from February’s +0.2% pace. Data from the US Census Bureau provided further insights into inventory and sales activity. Key data: Retail inventory gains signal businesses are rebuilding stock despite flat overall inventory growth. Philadelphia Fed Business Index Rises But Activity Mixed The Philly Fed manufacturing index improved to -4.0 in May, far stronger than the expected -11.0, and up sharply from April’s dismal -26.4. Highlights: Six-month expectations surged: This suggests a possible demand boom is coming—potentially resembling the post-COVID rebound dynamic. New York Manufacturing Declines Again, But Orders Rebound The Empire State Manufacturing Index fell for the third month in a row, hitting -9.2 in May, slightly better than the -10.0 expected. Key takeaways: Six-month outlooks showed improved optimism: The data paints a mixed picture: current conditions remain soft, but forward-looking indicators suggest a possible rebound. U.S. Industrial Output Flatlines in April Industrial production in the United States stalled in April, posting 0.0% growth versus expectations for a +0.2% increase. March data was revised higher from +0.3% to +0.4%. Manufacturing output contracted by -0.4%, underperforming both forecasts and the prior month’s gain. These figures suggest that the industrial sector may be cooling after earlier signs of recovery. Markets Eye April PCE After Tame CPI Print Expectations are building for a mild April reading on Core PCE, the Fed’s preferred inflation metric. WSJ’s Nick Timiraos noted that forecasts are trending lower following this week’s CPI release, although upcoming PPI and import price data may shift the outlook. While inflation indicators are moving in the right direction, many warn that these are lagging metrics. Markets are pricing in stronger growth due to easing trade tensions, which has driven Treasury yields higher. The implication: inflation could resurface, complicating the Fed’s path to rate cuts. Meta Delays Launch of “Behemoth” Llama 4 Model Amid Internal Struggles Meta Platforms has postponed the release of its highly anticipated Llama 4 large language model, known internally as “Behemoth,” due to ongoing internal concerns about its effectiveness and readiness, according to a report from The Wall Street Journal. Originally slated for an April 2025 debut, the AI model is now not expected until fall or later. Engineers familiar with the project have raised flags about underwhelming performance gains versus previous iterations, prompting top executives to rethink the structure of the AI division responsible for the model. Despite public claims that Behemoth would outperform its rivals, insiders say Meta tailored earlier Llama models for benchmark tests and overstated real-world performance. Two

Tech Extends Gains, Gold Slides, XRP Holds Ground

🔹 Markets: Nasdaq +0.72% led by semis—NVIDIA +4.16%, AMD +4.68%, Super Micro +16%. Fed cut odds ease post-CPI.
🔹 U.S. Outlook: Goldman sees April retail sales +0.4%. EIA reports +3.45M bbl crude build; gasoline demand remains strong.
🔹 Commodities: Gold fell to $3,182 as Treasury yields rose and risk appetite returned. Crude +0.82% to $63.15; key $64.71 resistance in focus.
🔹 Europe/Asia: Spain’s IBEX hits 2008 high. ECB flags USD funding risk. Asia mixed as U.S.-Asia trade deals near completion.
🔹 Global Spotlight: OPEC trims U.S. output growth forecast; Germany urges trade calm.
🔹 Crypto: XRP steady at $2.60 following $1B+ open interest surge. Trend remains bullish, though RSI signals possible short-term cooling.

Risk-On Rally Boosts Stocks, Crypto, and Commodities

🔹 Markets: S&P +0.72%, Nasdaq +1.61%. Dow -0.64% as UnitedHealth plunged on CEO exit. CPI rose +0.2% (vs. 0.3% est), y/y at 2.3%.
🔹 Canada: Carney finalizes cabinet. Champagne named Finance Minister. Focus shifts to May 27 Parliament return.
🔹 Commodities: Crude +2.78% to $63.67 (4th straight gain). Gold up to $3,250 on CPI miss. China drives global ETF gold inflows.
🔹 Europe/Asia: ECB may pause after July; ZEW sentiment jumps. China confirms tariff rollback; Xi urges trade peace.
🔹 Crypto: ETH +9% to $2,700 on CPI print. BTC dipped below $102K, triggering $730M in liquidations. XRP, ADA retreat on profit-taking.

North America News U.S. Stocks Surge on Tariff Relief; S&P and Nasdaq Post 2nd-Best Day Since 2022 Wall Street rallied hard on Monday after the U.S. announced it would slash tariffs on Chinese goods from 145% to 30% for the next 90 days, including a 20% fentanyl-specific tariff. The agreement, reached over the weekend, sparked aggressive buying across all major indices and pushed the S&P and Nasdaq to their second-best single-day performances since 2022. Major Index Performance Top Performers on the Day Big-name tech, energy, and retail stocks all rallied strongly: Noteworthy gainers among mega-cap and chip stocks included: Corporate Earnings Highlights April U.S. Budget Surplus Hits $258 Billion The U.S. federal budget posted a $258 billion surplus in April, slightly above forecasts of $256 billion. That compares to a $161 billion deficit in March and a $210 billion surplus in April 2025. This strong surplus aligns with April’s typical revenue surge due to the tax season. It also reflects rising receipts and flat-to-moderate expenditure levels in the month. Fed Survey: Lending Standards Tighten Sharply, Credit Demand Slumps The Federal Reserve’s Senior Loan Officer Opinion Survey for Q2 shows that banks are tightening credit standards across the board as borrower demand weakens, especially in business and commercial real estate lending. Business Lending Commercial and Industrial (C&I) Loans: Commercial Real Estate (CRE) Loans: Household Lending Residential Real Estate (RRE): Consumer Loans: House Tax Bill: Exempt workers from tips, with exceptions US House Republicans tax bill: Fed’s Goolbee: Tariffs on China would still have a stagflationary impulse Bessent: We want a decoupling with China for strategic necessities On Iran/Russia: Trump: We achieved a total reset with China Trump: I just called the Speaker of the House and I just called the leader, our leader in the Senate, John Thune..spoke to both of them. I said, when “You’re going to have to score two things. You’re going to have to number one, score that hundreds of billions of dollars of tariff money is coming in. But even bigger than that, you’re going to have to score that year. Your cost for Medicaid and Medicare and just basically pharmaceuticals and drugs is going down at a level that nobody has ever seen before. It’ll pay for the Golden Dome.” I see the Golden dome is there. See? That’ll easily pay for the Golden Dome. And we’ll have a lot of money left over. Fed’s Kugler: Trade policy shifting but still likely to lead to higher prices and less GDP Trump Doubles Down: Drug Prices Slashed by 59% “Plus!” In a fiery Truth Social post, Donald Trump declared: “DRUG PRICES TO BE CUT BY 59%, PLUS! Gasoline, Energy, Groceries, and all other costs, DOWN. NO INFLATION!!! LOVE, DJT” Though Trump’s post lacked specifics beyond his earlier executive order, he reinforced his stance that major cost-of-living components will be addressed. However, analysts note he’s unlikely to secure rate cuts from the Fed under current inflation metrics. Trump to Slash Prescription Drug Prices by Up to 80% Former President Donald Trump announced that prescription drug and pharmaceutical prices in the U.S. will be cut by 30% to 80%, nearly immediately. He plans to sign the executive order at 9:00 a.m. Monday at the White House. He stated the U.S. will match the lowest drug prices paid by any country in the world. Unlike vague outcomes from the weekend’s China talks, this policy carries direct consumer impact, especially for those dependent on long-term medication. Bessent: We have reached agreement with China on a 90-day pause, moving down tariff levels Commodities News Gold Suffers Worst Selloff Since November 2024 Gold prices plummeted more than 3% Monday as easing U.S.-China trade tensions triggered a broad risk-on rotation, sapping demand for safe-haven assets. The sharp move comes after the U.S. and China mutually agreed to reduce tariffs for 90 days: Market Outlook Despite the daily loss, gold remains up 22.83% year-to-date, after rising 27.22% in 2024 and 13.16% in 2023. Macro Influences Swap markets continue to price in a Fed rate cut of 25bps in July, with a second cut expected before year-end. Crude Oil Rises for Third Straight Day, Settles at $61.95 Crude oil futures rose again Monday, with WTI closing at $61.95, up $0.93 or +1.52%. This marks the third consecutive day of gains, as markets respond positively to the temporary easing of trade tensions between the U.S. and China. Traders are also watching for possible shifts in OPEC+ output policy and broader global demand recovery indicators. Oil Prices Strengthen on Trade Talks, Supply Cuts Oil prices saw gains on optimism over U.S.-China trade progress and reduced U.S. drilling activity. As of the latest trade: Key developments: This shift in trader positioning suggests cautious optimism, but markets are watching for further impact from evolving tariff policy. U.S. Natural Gas Prices Slide on Inventory Surge ING reports that U.S. natural gas futures opened lower on Thursday amid signs that supply is outpacing demand. Key points: The price slide comes despite mild support from seasonal consumption expectations. Palladium Inches Higher; Platinum Holds Steady Trading opened mixed for Platinum Group Metals (PGMs): Both metals have been relatively range-bound to start the week, as investors digest broader commodity market movements and assess global demand prospects. Goldman Sachs Cuts Brent/WTI Price Forecasts Through 2026 Goldman Sachs is dialing back its outlook for oil prices, citing strong supply growth beyond U.S. shale: The firm notes that steady non-U.S. supply growth will likely keep a lid on prices over the medium term. Europe News European Markets Close Higher; German DAX Hits New Record European equity markets closed solidly higher on Monday, with Germany’s DAX index hitting a new all-time high. Closing Levels: The rally follows improving global sentiment as investors welcomed tariff reductions between the U.S. and China, alongside better-than-expected economic data and strong corporate earnings across the eurozone. Swiss Sight Deposits See Slight Shift as SNB Watches Developments As of the week ending 9 May, the Swiss National Bank (SNB) reported: The weekly changes

North America News U.S. Stock Indexes End Mixed; Weekly Losses Modest U.S. markets wrapped up the day with mixed results and posted slight losses for the week. For the week: Markets showed caution as traders weighed economic uncertainty, geopolitical tensions, and upcoming U.S.-China trade talks. Nippon Steel Still Pushing to Acquire U.S. Steel Nippon Steel says it hasn’t changed course on its plan to acquire U.S. Steel, despite ongoing political hurdles. Negotiations with the U.S. government continue, with the Committee on Foreign Investment in the United States (CFIUS) expected to offer a recommendation by May 21. Former President Trump, now expected to decide by June 5, has expressed opposition, stating, “we don’t want to see it go to Japan.” Fed’s Barr: Monetary policy is in a good position to adjust as conditions unfold Fed’s Barkin: Tariffs to lead to higher inflation and lower growth in US and abroad Fed’s Kugler: The US labour market is stable, close to maximum employment Fed’s Williams: Now is a time of great uncertainty and change U.S. Treasury Launches ‘Known Investor’ Fast Track for Allies The U.S. Treasury is piloting a new program to streamline foreign investment from partner countries. The “Known Investor” portal will allow vetted investors to submit information to CFIUS ahead of formal filings, speeding up the review process. This initiative supports the America First Investment Policy by encouraging safe, stable investments while safeguarding national security. Treasury Secretary Scott Bessent emphasized its importance for attracting trusted capital and enhancing transparency. Tesla Cancels Cybertruck Range Extender Battery Tesla has dropped its plan to offer a $16,000 range extender for the Cybertruck. Originally slated for release in early 2025—later delayed to mid-year—the accessory would have extended range to 470 miles (eventually revised to 445 miles), but required giving up half the truck bed. The company has confirmed it will issue refunds to those who placed deposits. Issues with practicality and utility appear to have led to the decision. Canada Adds 7.4K Jobs in April, Unemployment Edges Up Canada added 7,400 jobs in April, beating expectations of 2,500, though the unemployment rate ticked up to 6.9% from 6.7%. Full-time jobs surged by 31.5K, while part-time roles fell by 24.2K. Manufacturing jobs dropped by 31K. The participation rate edged up to 65.3%, and wages for permanent employees held steady at 3.5% y/y. Total hours worked rose 0.4% month-over-month and were up 0.9% from a year earlier. Commodities News Gold Jumps Over 1% as Dollar Weakens, Global Tensions Rise Gold rallied more than 1% Friday, buoyed by a weaker dollar and rising global risk aversion. As U.S. Treasury yields declined, the appeal of non-yielding assets like gold increased. At last check, gold was trading at $3,338 per ounce. The U.S. Dollar Index (DXY) fell 0.32% to 100.31, reversing two days of gains. Traders are positioning for possible fallout from escalating geopolitical flashpoints and key trade negotiations between the U.S. and China scheduled for Saturday in Switzerland. Adding fuel to risk-off sentiment, President Trump floated an 80% tariff on Chinese goods, intensifying uncertainty. Meanwhile, border tensions between India and Pakistan escalated, with accusations of artillery and drone use on both sides. Central banks continued building reserves: Markets are also pricing in a 25 bps Fed rate cut in July, with two more cuts expected before year-end. China’s Copper Ore Imports Hit Record High China’s copper ore imports surged to a record high in April, signaling strong demand despite a recent dip in refined copper imports, according to Commerzbank’s Thu Lan Nguyen. Chinese producers appear to be ramping up domestic processing as ore imports climb, even as refining charges remain low—suggesting tight ore supply globally. This shift may worsen ore availability outside China, potentially amplifying China’s dominance in global copper production. Chile, the world’s top copper supplier, offered a slight reprieve. Its largest producer recently ramped up output after years of underperformance due to operational issues. U.S. and Canadian Rig Counts Both Drop by 6 Baker Hughes reported a drop of 6 rigs in both the U.S. and Canada. The U.S. count now sits at 578—down 25 from last year—with oil rigs down 5 to 474, gas rigs unchanged, and miscellaneous rigs down 1. Offshore rigs in the U.S. also declined by 3 to 11. In Canada, the total rig count stands at 114, with oil rigs falling by 6 to 68. Compared to last year, Canada’s count is down 2 overall, with gas rigs down by 10 despite an increase in oil rigs. U.S. Crude Oil Ends Week at $61.02, Up 1.85% U.S. crude futures closed at $61.02 per barrel, up $1.11 or 1.85% on the day. The weekly gain was 4.46%, helped by a sharp recovery from an earlier low of $55.39—just above the year’s low of $55.15. The intraday range stretched from $59.92 to $61.42. EIA Cuts U.S. Oil Production Forecast The U.S. Energy Information Administration (EIA) has lowered its outlook for domestic oil output, citing falling prices and reduced drilling activity. The revised forecast now expects U.S. production to rise by just 200,000 barrels per day (bpd) this year. Peak production is forecast to hit 13.7 million bpd in December, then slide to 13.44 million bpd by end-2026. Some shale producers have already begun pulling back on spending, particularly in the Permian Basin. One executive described the downturn as a “dramatic decline in business,” signaling an earlier-than-expected output drop. China’s Crude Oil Imports Stay Elevated in April Chinese refiners continued to stock up on crude in April, importing 11.7 million bpd, according to customs data. Though slightly lower than March’s record levels, imports were up 7.5% year-over-year, boosted by a drop in global prices. Data provider Vortexa estimates stockpiling in April exceeded 1 million bpd, suggesting inventory building was a strategic move. Imports from Iran also stayed strong at around 1.5 million bpd. That pace may not hold. The U.S. has stepped up enforcement, adding more Chinese independent refineries to its sanctions list over their Iranian oil purchases. Another refinery was sanctioned just this