ANGLES.

The K Is Getting Steeper.

The truce between the US and Iran came under severe stress over the weekend with both sides firing on one another and each blaming the other. But there was some geopolitical de-escalation on Monday that pushed stocks higher to start a holiday-shortened week, despite interest rates climbing steeply on the back of ongoing Fed rate hike fears. There was a flurry of Supreme Court decisions, including upholding the concept of birthright citizenship, confirming the US president as an adjudicated sex offender, opening the door to unconstrained electoral spending by political parties and - more importantly for Wall Street - restricting presidential ability to fire Federal Reserve officials on a whim, somewhat calming recent growing fears about central bank independence. Tech bargain-hunters dipped their toes back into the water and the major indexes snapped their five-day losing streak with some solid gains. The month, the quarter and the first half of 2026 came to a close on Tuesday with oil prices dipping below $70 and stocks continuing their rebound from the difficult previous week, led by more Big Tech/AI buying. It can be difficult to trust pricing around key calendar dates like this because of fund manager window dressing, but what is not in doubt is that we had just experienced the best quarter for the S&P 500 (up by 15%) since the big COVID bounce of 2020 and the NASDAQ’s second-best quarter (up 21% despite a record volume one-day fall just last month) since its recovery from the dot-com crash of 2001. See my Q2 Market ReviewThat said, financial markets are now entering what historically risks being the poorest-performing quarter of the year, even though markets do still rise about two-thirds of the time in Q3, including last year which saw a 7.5% jump in the S&P 500. July, Q3 and H2 kicked off on Wednesday with a snoozer. Attention was mostly focused on readying for the employment data the next day. The indexes all lost a bit of ground, even though a lot more S&P 500 stocks rose than fell over the course of the session. Another bout of chip stock selling put Asian stocks on the back foot on Thursday. The latest pre-market US Jobs Report was generally a disappointment with considerably lower job creation than expected last month and downward revisions to previous data, although the unemployment rate fell slightly to 4.2% as the size of the entire labor force contracted. Wall Street liked the idea of the Fed having a bit of breathing room when it comes to maybe having to raise the Fed Funds Rate and interest rates eased back from their early week spike as traders pared back on bets on any imminent hike (see INTEREST RATE EXPECTATIONS below). Stocks initially moved higher but then fell back again on renewed tech weakness. Volume was muted ahead of the long holiday weekend and the indexes ended the day little changed, but mostly higher for the shortened week. Some other things I’m thinking about ..* By many measures we just entered the eighth longest bull market in stocks since the Second World War at just over three and a half years. Of the previous seven, the average total length is around seven years with the shortest being about five years. We may have a way to go .. * According to the Federal Reserve, the top 20% of earners now account for 58% of all personal spending in the US, the highest proportion on record. Consequently, the bottom 80% of earners account for just 42%, the lowest on record. To put this into perspective, in the 1990s these groups accounted for roughly equal proportions of total personal spending at around 50% each. The K is getting steeper. * Iran is becoming more and more vocal about its intent to monetize the Strait of Hormuz using a toll system whenever it properly reopens, something it only figured out how to do after being attacked by the US. This is raising the stakes and adding complication when it comes to negotiations. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..“All sorts of crazy economic ideas are being taken seriously lately.” Bloomberg’s brilliant Allison Schrager bemoans the dubious idea of AI and government hooking up. .. AND I QUOTE ..“Those numbers are too high.”Tom Barkin, President of the Federal Reserve Bank of Richmond and voting member of the Federal Reserve rate setting committee, referring to US inflation data. The Fed traditionally combats growing inflation by raising interest rates. LAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. It rose 1.7%% last week, is higher by 13.9% over the last three months and is up 9.8% so far this year. * IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. It fell 0.1% last week, is higher by 18.7% over the last three months and is up 21.4% so far this year.* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. It rose 0.1% last week, is higher by 10.0% over the last three months and is up 13.1% so far this year. Data shown is total return (including dividends)INTEREST RATES:* FED FUNDS RATE * 3.625% (unchanged from a week ago)* PRIME RATE ** 6.75% (unchanged from a week ago)* 3 MONTH TREASURY 3.82% (3.83% a week ago)* 2 YEAR TREASURY 4.14% (4.08% a week ago)* 5 YEAR TREASURY 4.23% (4.12% a week ago)* 10 YEAR TREASURY *** 4.49% (4.38% a week ago)* 20 YEAR TREASURY 4.99% (4.87% a week ago)* 30 YEAR TREASURY 4.98% (4.87% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending. *** Used as a basis for determining mortgage interest rates.AVERAGE 30-YEAR FIXED MORTGAGE RATE:* 6.43%One week ago: 6.49%, one month ago: 6.49%, one year ago: 6.67%Data courtesy of the Federal Reserve Bank of St. Louis.INTEREST RATE EXPECTATIONS:Where...

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Chip-Wreck.

2w ago00:05:34Tap to summarize

Over the weekend, we were treated to the bizarre sight of the US and Iran delegations chummily sitting down together in Switzerland against a backdrop of the Strait of Hormuz being closed again after being sort of open for all of two days, Israel continuing its deadly assault on Lebanon and Trump again taking to social media to threaten more and more violence. By the time US markets opened on Monday, UK prime minister Starmer had resigned and Andy Burnham will become the country’s sixth leader in seven years next month after a weeks-long, slow-moving political coup. Initially at least, local financial markets appeared to be taking it in stride. The US indexes drifted lower in a vacuum of any credible US/Iran news beyond the endless tiresome spin from both sides, dragged down by profit-taking mainly in Big Tech/AI names including a rout of SpaceX, now down over 27% from its post-IPO high, having shed over $600 billion in value and reduced Musk from a trillionaire to a mere billionaire. Asian stocks crashed on Tuesday with trading halted by circuit-breakers in South Korea in the midst of a 10% plunge on a wave of selling of chip stocks, which spilled into Europe and the US on renewed fears that all this AI buildout is simply costing too much money amidst far-from-certain customer demand and could have resulted in over-valuation of many names including on Wall Street where the NASDAQ-100 tumbled by well over 3%.Things calmed down in Asia on Wednesday and there was an initial hard rebound when markets opened in New York as dip-buyers waded back in looking for bargains after Tuesday’s global chip-wreck, but they quickly withdrew as tech worries set in again and the indexes closed a touch lower for the session. With exquisite timing, chip/memory giant Micron, considered by many to be the new Nvidia, reported earnings after hours in a jittery environment and crushed all the analyst estimates. The stock soared in the after-market. This looked like it was just the boost that the stalled-out rally needed and US tech stocks came roaring out of the gate on Thursday, but once again doubts crept in later in the day after Apple and Microsoft were heavily punished following announcements of sweeping product price increases, OpenAI apparently considering a postponement of its IPO due to turbulent tech market conditions and reported firefights in the Strait of Hormuz. PCE inflation came in as expected at 4.1%, its highest level for over three years and more than double the Fed’s 2.0% target (which it hasn’t met for more than five years). Stocks closed slightly lower on the day. Following more tough sessions in Japan and South Korea, the US indexes went nowhere on Friday, essentially hugging the flatline all session but did complete a fifth straight day in the red for the first time this year, closing out a disappointing week but one that could definitely have been a lot worse. Some other things I’m thinking about ..* The best-performing stock of the so-called Magnificent Seven this year (Alphabet/Google) doesn’t even make the list of the 200 top-performing stocks of 2026. The AI investment cycle is maturing to a stage that is increasingly sensitive to more traditional equity market fundamentals and standards and the last few years’ outperformance of the Mag 7 could be coming to its inevitable end. * Gold and crypto both continue to disappoint their ever-dwindling armies of retail super-fans and prices crapped out again last week with Bitcoin in tatters, dipping below $59k and now worth less than half what it was just nine months ago. The “quick buck” crowd are turning their limited attention span to other outlets; prediction markets, sports betting and zero-day options contracts, for example, to feed their depravity and are pulling assets from their gold and crypto holdings to plough into these shiny new toys. * Oil prices have now round-tripped to where they were on the eve of the war. The same cannot be said of shorter term interest rates. On February 27th, the two-year Treasury rate was 3.38%. Last week it touched 4.24% before pulling back. That’s a major and sustained shift and reflective of a significant change in the outlook for where the Fed Funds Rate is heading (see INTEREST RATE EXPECTATIONS below).If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..How big should your emergency fund be? It’s not just a math question. .. AND I QUOTE ..“The number-one job of the hedge-fund manager is not to make sure that you can retire with a smile on your face - it's for him to retire with a smile on his face.”Mark CubanLAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. It fell 2.1% last week, is higher by 15.3% over the last three months and is up 7.5% so far this year. * IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. It rose 1.3% last week, is higher by 19.0% over the last three months and is up 22.3% so far this year.* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. It fell 2.5% last week, is higher by 13.6% over the last three months and is up 12.6% so far this year. Data shown is total return (including dividends)INTEREST RATES:* FED FUNDS RATE * 3.625% (unchanged from a week ago)* PRIME RATE ** 6.75% (unchanged from a week ago)* 3 MONTH TREASURY 3.83% (3.83% a week ago)* 2 YEAR TREASURY 4.08% (4.19% a week ago)* 5 YEAR TREASURY 4.12% (4.23% a week ago)* 10 YEAR TREASURY *** 4.38% (4.46% a week ago)* 20 YEAR TREASURY 4.87% (4.91% a week ago)* 30 YEAR TREASURY 4.87% (4.90% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending. *** Used as a basis for determining mortgage interest rates.AVERAGE 30-YEAR FIXED MORTGAGE RATE:* 6.49%One week ago: 6.47%, one month ago: 6.52%, one year ago: 6.77%Data courtesy of the Federal Reserve Bank of St. Louis.INTEREST RATE EXPECTATIONS:Where will the Fed Funds interest rate be after the next rate-setting meeting on July 29th?* 0.25% higher than now .. 30% probability (38% a week ago)<...

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Banana Skin Potential.

3w ago00:05:41Tap to summarize

A 60-day extension of the ceasefire, a conditional reopening of the Strait of Hormuz and a suspension of the US blockade was announced on Sunday but it seems nothing has been resolved when it comes to Iran’s nuclear program, its frozen assets, war reparations or the lifting of sanctions, which would all be the subject of “further discussions” over the coming months. Despite lots of missing detail and contradictory interpretations from both sides each desperate to claim victory to their domestic audiences, financial markets breathed a sigh of relief on Monday, sending oil prices spinning to three-month lows and stocks exploding higher to start a holiday-shortened week of central bank interest rate decisions around the world, including from the US Federal Reserve on Wednesday.Traders decided that the many nagging doubts about the limitations and viability of the memorandum of understanding (MOU) could wait for another day and the US indexes had their best session since April, even though only about half the names in the S&P 500 actually moved higher with tech stocks doing most of the heavy lifting. Overnight, the Japanese central bank hiked local interest rates to 1.00%, astonishingly its highest level since the original Toy Story came out in 1995, but Wall Street took a breather on Tuesday giving back some of Monday’s blistering rally. Some skepticism started to creep in about the still-unclear finer details of the US/Iran deal that Trump described as “not final”, but attention quickly turned to the FOMC.Fed Day opened on Wednesday with a consumer read from Retail Sales data which blew through expectations, indicating that Americans are still unable to stop shopping. Under newly-minted Fed chairman Kevin Warsh, the committee held the Fed Funds Rate unchanged as expected but it seems from the quarterly Dot Plot that many members now expect to be raising it before year-end in response to the growing specter of inflation fueled by tariffs and war. Warsh said he didn’t care about financial market reaction to his comments, which is just as well since Wall Street read the tealeaves and decided to aggressively sell stocks and drive shorter term interest rates higher. All of Monday’s solid gains were erased. The US/Iran MOU, which became less and less impressive the more we learned about it (see below), was signed on Wednesday evening. Now the real work begins, getting the important stuff agreed upon in the next sixty days and return to a fully functioning and toll-free Strait of Hormuz as soon as possible. There’s plenty of banana skin potential between here and there. Overnight, the Bank of England left UK interest rates unchanged. After two days of US index declines, dip-buyers stormed back in a big way on Thursday, which was a synthetic Friday with US markets closed the next day. Oil prices continued to retreat and interest rates eased back from Wednesday’s Fed-induced spike. Big Tech/AI led a strong recovery with the NASDAQ setting a new all-time daily volume record and the US indexes finished the trading week nicely in the green. Some other things I’m thinking about ..* Trump sought to break Iran’s regime in weeks. Months later and at a cost of billions of taxpayer dollars and thousands of lives, he seems to have now settled for conditionally reopening the Strait of Hormuz (which was fully open on February 27th). Iranian officials quickly and easily figured out that Trump has no desire to extend the conflict that he started but which is seriously damaging him domestically and they negotiated accordingly. * The US president has been forced into agreeing to little more than a high value pause which has broken almost all of his supposed red lines and signed in Versailles of all places! It’s not even close to the victory that he will falsely but inevitably claim. * From Wall Street’s perspective, what matters is that oil prices head back towards where they were before the war and that the inflationary pressures brought about by the conflict ease, because if inflation metrics continue to heat up, fears of interest rate hikes will rise and that’s a potential threat to the three-and-a-half year rally in stocks. * US oil reserves are at their lowest levels since 1983. This means that the stakes are high when it comes to the upcoming negotiations between the US and Iran because if things unravel (and there were already plenty of signs of strain and backtracking just on day one, not to mention Israel going straight back to bombing Lebanon within hours of the MOU being signed), there is very little breathing room before US consumers and businesses really start to feel the pinch. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..Whenever Barry Ritholtz tells us what he’s thinking about, we should all listen and learn. I know I do. .. AND I QUOTE ..“Almost uniquely in the field of investing, doing nothing can be incredibly powerful, not lazy or negligent. Far too much value is placed on being active and the industry perpetuates that for its own gain.”Morgan Housel, author and partner at Collaborative FundLAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. It rose 0.9% last week, is higher by 15.1% over the last three months and is up 9.8% so far this year. * IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. It rose 0.9% last week, is higher by 19.0% over the last three months and is up 22.3% so far this year.* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. It rose 1.3% last week, is higher by 16.1% over the last three months and is up 15.1% so far this year. Data shown is total return (including dividends)INTEREST RATES:* FED FUNDS RATE * 3.625% (unchanged from a week ago)* PRIME RATE ** 6.75% (unchanged from a week ago)* 3 MONTH TREASURY 3.83% (3.78% a week ago)* 2 YEAR TREASURY 4.19% (4.09% a week ago)* 5 YEAR TREASURY 4.23% (4.21% a week ago)* 10 YEAR TREASURY *** 4.46% (4.48% a week ago)* 20 YEAR TREASURY 4.91% (4.98% a week ago)* 30 YEAR TREASURY 4.90% (4.97% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending. *** Used as a basis for determining mortgage interest rates.</...

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Back In The Driving Seat.

4w ago00:04:45Tap to summarize

Alive and well, the US/Iran war, which we were told would last about four weeks, entered its 100th day over the weekend despite weeks of multiple fake reports of its demise and a Trump declaration back on April 17th that the Strait of Hormuz had re-opened (still waiting for that one). The odds of a swift resolution lengthened further as Iran and Israel exchanged fire on Sunday for the first time since early April and oil prices predictably spiked in response. Traders in Asia picked up where their Wall Street brethren had left off the previous Friday by furiously offloading tech stocks on Monday, but there was a solid bounce in New York as dip buyers swarmed in to scoop up bargains from the tech wreckage ahead of Wednesday’s final set of inflation data before the next Federal Reserve rate-setting meeting on June 17th. After hours, OpenAI joined Anthropic and SpaceX in confirming an imminent IPO, while at the same time reports began to emerge of the US government possibly taking a taxpayer-funded stake in the company. Stocks continued higher on Tuesday morning as oil prices and interest rates eased. The dip-buying frenzy quickly faded however as concerns re-emerged about the lofty valuations of some of the Big Tech/AI names, particularly those that had spiked over the last couple of weeks and sparked another orgy of tech selling, further fueled by news that Iran had downed a US military helicopter and also a sense that institutional investors were unloading some of their tech holdings in order to free up funds to buy SpaceX stock on Friday. But the dip-buyers stepped back in after lunch to stop the bleeding and the indexes eventually closed a wildly volatile day only moderately lower. The US launched fresh attacks on Iran in response to the helicopter incident and Trump’s increasingly rambling rhetoric got more threatening, but there is clearly headline fatigue on Wall Street right now. The main business of the day on Wednesday was the May CPI data which showed inflation soaring to 4.2%, up a full half a percent from the previous month. The last time CPI was above 4% was in 2023 when the Federal Reserve was in a cycle of raising the Fed Funds Rate up to 5.325%. It’s currently 3.625%. The idea of any upcoming rate cuts now looks highly fanciful. The spicy inflation print sent stocks nosediving again with tech names once more leading the charge lower. This time the dip-buyers were conspicuous by their absence. After hours, Oracle disappointed with an underwhelming earnings report and traders dumped the stock. Thursday was the final ever day of a stock market without SpaceX in it (see ARTICLE OF THE WEEK below). The European Central Bank (ECB) raised local interest rates and the May PPI report showed that wholesale inflation in the US rose by the most since the dark days of 2022 and is now running hot at 6.5%. The chaotic TACO rollercoaster kicked back in with Trump promising hellfire in the morning but by lunchtime had abruptly called off air strikes and told us for the umpteenth time that a peace deal is basically done and will be signed in days. Oil prices and interest rates fell and the bulls jumped back in the driving seat as traders chose to interpret all this rather positively. The biggest IPO in history by a factor of three landed on Friday with SpaceX’s initial price of $135 valuing the firm at ~$1.8 trillion which instantly made it one of the top ten largest companies in the world. The price ended the session at a little over $160 and the indexes made more gains to close the week in the green on a cautiously growing hope that maybe, just maybe, this time some kind of war resolution might possibly be for real. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE(S) OF THE WEEK ..Lots of chatter last week about some (but not all) of the indexes changing their policies to accommodate swift inclusion of SpaceX stock and likely Anthropic and OpenAI as well and thereby impose often unwanted ownership upon retail investors in their investment and retirement accounts. Two insightful articles from Nick Maggiulli and Callie Cox of Ritholtz Wealth Management cut through the noise on where we stand on this and what it could really mean for your investments. .. AND I QUOTE ..“At $135 a share, you have to believe everything will work fantastically, things that have never, ever happened before … you’re betting that the business exists already.”Cory Johnson, Epistrophy Capital Research chief market strategist on the SpaceX IPOLAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. It rose 0.7% last week, is higher by 12.1% over the last three months and is up 9.1% so far this year. * IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. It rose 2.7% last week, is higher by 19.0% over the last three months and is up 19.2% so far this year.* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. It rose 4.7% last week, is higher by 11.8% over the last three months and is up 13.7% so far this year. Data shown is total return (including dividends)INTEREST RATES:* FED FUNDS RATE * 3.625% (unchanged from a week ago)* PRIME RATE ** 6.75% (unchanged from a week ago)* 3 MONTH TREASURY 3.78% (3.78% a week ago)* 2 YEAR TREASURY 4.09% (4.17% a week ago)* 5 YEAR TREASURY 4.21% (4.29% a week ago)* 10 YEAR TREASURY *** 4.48% (4.55% a week ago)* 20 YEAR TREASURY 4.98% (5.03% a week ago)* 30 YEAR TREASURY 4.97% (5.01% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending. *** Used as a basis for determining mortgage interest rates.AVERAGE 30-YEAR FIXED MORTGAGE RATE:* 6.52%One week ago: 6.48%, one month ago: 6.37%, one year ago: 6.84%Data courtesy of the Federal Reserve Bank of St. Louis.INTEREST RATE EXPECTATIONS:Where will the Fed Funds interest rate be after the next rate-setting meeting on June 17th?* 0.25% higher than now .. 0% probab...

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Sit Back And Relax.

Jun 700:06:34Tap to summarize

Following another weekend of zero trustworthy information on the war and peace front, financial markets were hoping to be able to focus their attention for a few days on the more tangible reality of earnings, economic data and evolving narratives surrounding interest rates and AI etc. as a banger of a month of May for stocks gave way to the final month of Q2 on Monday. Energy traders ignored Trump’s advice to just“sit back and relax” and pushed the oil price back up above $90 after Iran announced that it was breaking off ceasefire negotiations with the US until Israel halted its deadly attacks in Gaza and Lebanon. This created something of a speed-bump to the recent furious stock rally and the indexes closed barely changed but still fractionally higher enough for an eighth straight day in the green. On Tuesday, Marvell (on a deal with Nvidia) and Hewlett Packard (on impressive earnings) became the latest tech stocks to explode higher. The indexes only inched up a little but still enough for new all-time highs for a fifth session running. For the S&P 500 index, it was the 14th record high of the year and the 20th for the NASDAQ. Overnight into Wednesday, Trump declared negotiations with Iran to be “very boring” and implied that the Strait of Hormuz might not open before Labor Day which, along with more exchanges of fire in the region, kept the upward pressure on oil prices. Trump also decided that this would be a good time to revisit his dormant tariff policy, claiming to somehow suddenly care about international child labor laws as a pretext. Stocks at last succumbed to the negativity and the indexes’ nine-day winning streak finally came to an end as stocks pulled back from their record levels early on and this time never recovered. Wall Street’s worries spilled into Asian and European markets overnight with increasing concern about the consequences of Trump’s continued inability to bring to an end the war he started and his apparent loss of control and influence over Israel and Russia, third-party geopolitical actors who have both been intensifying their attacks on civilians. Index heavyweight Broadcom bucked the trend with a poor earnings report and the stock (which had risen 38% since early April) was brutally punished when New York opened on Thursday. Since Broadcom is the fifth highest constituent of the S&P 500 index and the fourth biggest in the NASDAQ, this put a lid on a broad market advance and the indexes closed little changed with signs of an investor rotation out of the Big Tech/AI stocks and into more old school names, as evidenced by the stupid dinosaur Dow Jones Industrial Average index reaching a new all-time record high while the NASDAQ tumbled. The May Jobs Report dropped on Friday morning and showed a massive upside surprise in new payrolls although the unemployment rate remained unchanged at 4.3%. Average wages continue to fail to keep up with inflation. Interest rates soared and stocks dumped in response as financial markets reacted by fully pricing in a 0.25% Fed Funds Rate increase before year-end (see INTEREST RATE EXPECTATIONS below). Things quickly snowballed into a full-blown tech wreck with a rush to the exits on fears of over-valuation in certain names, resulting in the indexes’ first weekly losses since March. Interestingly, although the S&P 500 index plummeted by 2.7% on the day, less than half the stocks in the index moved lower at all, emphasizing the highly selective nature of the aggressive selling, which was heavily concentrated in large tech and AI stocks. Some other things I’m thinking about ..* There has been a subtle shift in Wall Street’s approach to the war. Fed up with having its chain yanked by endless gaslighting nonsense and confused false messaging about an imaginary peace deal that quite obviously doesn’t exist and the US Strategic Petroleum Reserve on pace to hit its lowest level since the early 1980s later this month, traders are now focusing on “Tank Bottom”. This is actual inventory data which suggests that, absent a deal to properly open the Strait of Hormuz soon, severe shortages of energy supplies (especially diesel) will start to noticeably hit US consumers and businesses hard as early as August. * Crypto has utterly failed to participate in the recent risk-on environment, to put it mildly. Indeed, the price of Bitcoin plunged yet again last week to its lowest level since 2024. Over the last year as of Friday’s close, Bitcoin has fallen by 42% while the S&P 500 index has risen 26%, largely driven by AI. That’s a massive discrepancy for investors to handle and there has been some very significant institutional liquidation of crypto holdings and meaningful net outflows from crypto ETFs, demonstrating a clear shift in sentiment. There’s a certain irony in the fact that crypto is essentially being kept in its box by AI.* All of the gains in the gold price since the end of last year have now been erased as it went negative for 2026 last week. The many investors who hopped on the bandwagon in late 2025 after falling for the media hype and the pervasive but false myth that precious metals are a good inflation hedge are now most likely nursing losses on their gold position and also missed out on stock market gains as an additional opportunity cost. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..Misunderstanding the increasingly blurred line between investing and gambling can severely endanger your financial security. An important article from the wonderful Liz Ann Sonders. .. AND I QUOTE ..“Being force-fed shares of SpaceX, Anthropic and OpenAI [in their investment and retirement accounts] may be a bitter pill to swallow for the many, many Americans who are not at all excited about artificial intelligence. In April, a Gallup poll showed just 18% of people ages 14 to 29 feel hopeful about AI, down from 27% in 2025.”Bess Levin, New York MagazineLAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. It fell 2.7% last week, is higher by 10.0% over the last three months and is up 8.6% so far this year. * IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. It fell 3.6% last week, is higher by 11.3% over the last three months and is up 12.5% so far this year.* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. It fell 3.6% last week, is higher by 6.6% over the last three months and is up 10.2% so far this year. Data shown is total return (including dividends)INTEREST RATES:* FED FUNDS RATE * 3.625% (unchanged from a week ago)* PRIME RATE ** 6.75% (unchanged from a week ago)* 3 MONTH TREASURY 3.78% (3.69% a week ago)* 2 YEAR TREASURY 4.17% (3.98% a week ago)* 5 YEAR TREASURY 4.29% (4.13% a week ago)* 10 YEAR TREASURY *** 4.55% (4.45% a week ago)* 20 YEAR TREASURY 5.03% (4.98% a week ago)<p...

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Half Full.

May 3100:05:27Tap to summarize

Trump and Rubio spent last Saturday teasing that a US/Iran agreement including a re-opening of the Strait of Hormuz was “95% done” and was hours away from being finally announced. Iran quickly denied that anything was imminent and indeed there was nothing substantial to report by the time Asian and European markets opened on Monday, which was a holiday in the US and a number of other countries. Nevertheless, oil prices tumbled and overseas stocks moved higher on the prospect of an end to the conflict. There was still nothing to report by the time US traders returned to their posts on Tuesday morning. Indeed, Trump had actually ordered renewed air strikes overnight and Israel resumed its assault on civilian targets in both Gaza and Lebanon, all of which stalled gains in Asian and European stock markets. US stocks initially surged with Big Tech and small caps once again leading the charge and interest rates dived as Wall Street got its first chance to react to the possible progress, taking its cues from still-falling energy prices. Enthusiasm waned as the session wore on, however, with more non-stop war blather but precious little evidence of any deal. The indexes still managed to finish in the green, though. There were yet more claims and counter-claims of an accord as well as a fountain of confusing rhetoric on Wednesday (including a head-scratching threat from Trump to “blow up” US ally Oman), but jaded traders were tuning it out, viewing the US administration as a bit like the teacher in a Charlie Brown cartoon and finally appear to be stubbornly refusing to engage with all the nonsense in the absence of anything tangible or even vaguely accurate to digest. Stocks inched just a little higher but by enough (you guessed it) to set new all-time records for the major indexes. The US launched more air strikes overnight into Thursday sending energy prices spinning higher again. Premarket data drops included the latest GDP estimate showing a slightly disappointing 1.6% growth rate and PCE annualized inflation holding steady as expected at 3.8%. Solid earnings from Best Buy and Dollar Tree indicated that, while Americans are extremely pissed off right now according to record low consumer sentiment data, they just can’t stop spending money. Mostly due to simply following the path of least resistance, stocks drifted higher without too much conviction to complete a sixth straight day of gains and move deeper into record high territory. The party continued into the last trading day of the month on Friday, fueled in part by Dell whose stock price exploded higher by 33% at the open after blowout earnings and outlook. Despite some late profit-taking, the winning streak for the major indexes remained intact to get to seven straight days with three sessions in a row each resulting in new all-time record highs. The S&P 500 closed up 6.2% for the month of May and scored its ninth straight week of gains while the NASDAQ completed its best-performing two-month spell since the original Tobey Maguire Spiderman movie was in cinemas back in 2002. Some other things I’m thinking about ..* The Strait of Hormuz has been closed for three months now. Over that time the S&P 500 is up ~10% and the NASDAQ by ~20%. Stocks are being driven by a tug-of-war between geopolitics, oil prices, interest rates and a powerful earnings and AI narrative, but all with a highly asymmetric “glass is half full” bias, leading to a current market environment where good news is great news, no news is good news and even bad news is kind of okay. * The face-ripping run of Micron, with the stock price up over 850% in the last year and doubling in value in just 48 days to above a trillion dollar valuation, is helping to pull the tech sector back to a position of dominance. Of the eleven sectors in the S&P 500, Technology is the only one outperforming the index since the recovery from the lows of early April. This lack of breadth to the most recent rally can be looked at in two ways: * With concern - as the gains are highly concentrated and a nasty turn in the sector or even in just a few names would badly impact the indexes * With relish - at the prospect of the rest of the sectors catching up with the index’s spectacular tech leadership. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..Homeowners’ insurance premiums and deductibles are soaring all over the country. The insurance companies tell us that their policies provide financial peace of mind, but almost half the time they will refuse to pay out on your claim. .. AND I QUOTE ..“Stocks are priced for perfection in an imperfect world.”Emily Roland, JH Investment Management co-chief investment strategistLAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 0.7% last week, is higher by 10.6% over the last three months and is up 11.2% so far this year. * IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 0.6% last week, is higher by 11.3% over the last three months and is up 18.2% so far this year.* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 0.5% last week, is higher by 2.8% over the last three months and is up 14.2% so far this year. Data shown is total return (including dividends)INTEREST RATES:* FED FUNDS RATE * 3.625% (unchanged from a week ago)* PRIME RATE ** 6.75% (unchanged from a week ago)* 3 MONTH TREASURY 3.69% (3.68% a week ago)* 2 YEAR TREASURY 3.98% (4.13% a week ago)* 5 YEAR TREASURY 4.13% (4.27% a week ago)* 10 YEAR TREASURY *** 4.45% (4.56% a week ago)* 20 YEAR TREASURY 4.98% (5.06% a week ago)* 30 YEAR TREASURY 4.99% (5.07% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending. *** Used as a basis for determining mortgage interest rates.AVERAGE 30-YEAR FIXED MORTGAGE RATE:* 6.53%One week ago: 6.51%, one month ago: 6.29%, one year ago: 6.89%Data courtesy of the Federal Reserve Bank of St. Louis.INTEREST RATE EXPECTATIONS:Where will the Fed Funds interest rate be after the next rate-setting meeting on June 17th?* <strong...

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TACO or NACHO?

May 2400:05:54Tap to summarize

Another weekend, another complete lack of progress or even any useful information related to the Iran war as the paralysis continued with both sides wasting everybody’s time and effort by offering up proposals that are clearly non-starters since they know full well the other side won’t accept them. Wall Street loves itself a corny acronym and while bulls are tending to still hold on to the long-standing principle of TACO, many of the bears are adopting NACHO (Not A Chance Hormuz Opens). All we really got was Trump barking that “the clock is ticking”. No s**t, thought Wall Street traders who had been promised an end to all this uncertainty weeks ago. With inflation fire alarms starting to go off all over the world, markets made a cautious start to the week on Monday. After Japanese interest rates were driven to the highest levels in history overnight, stock prices dipped in New York, led lower by recently-buoyant Big Tech names, with energy prices and US interest rates continuing to head north on slowly evaporating confidence in an imminent workable US/Iran pact. Oil prices eased slightly late on as Trump implausibly announced that he had been talked out of resuming military strikes on Iran by Gulf allies pending some kind of unspecified deal, but Wall Street shrugged this off on Tuesday as just another tiresome and transparent negotiating ploy. The first of the week’s impactful earnings reports came out with Home Depot disappointing. The indexes retreated further, again tech-fueled, with stock traders nervously eyeing the one-way traffic in bond markets that was sending longer term interest rates to highs not seen since Soulja Boy topped the Billboard charts. Wall Street got another read on the American consumer with Target, TJ Maxx and Lowe’s earnings on Wednesday morning all beating estimates. There was nothing in the released minutes from the latest Fed meeting that indicated an imminent Fed Funds Rate cut, but they don’t seem to be overtly plotting a hike either, although the most commonly-expected next Fed move in 2026 has now flipped over from doing nothing to actually raising rates (see INTEREST RATE EXPECTATIONS below). Stocks chose to take encouragement from the continued positive earnings environment and the indexes moved nicely higher, erasing the losses of the previous two days as oil prices drifted lower. Bonds had a much better session as interest rates pulled back from their recent highs. Nvidia’s earnings after the bell were perfectly good but lacked a wow factor and the stock did little in the after-market. On Thursday, Walmart’s pre-market earnings, considered a good barometer of the state of lower-and-middle income consumers and the K-shaped economy, showed significant profit margin compression and the stock sank. Combined with a muted reaction to Nvidia’s numbers and the continued endless foot-dragging and more unruly rhetoric from both sides of the Iran war spiking energy prices again, this sent the indexes slipping back into the red early on, but a late bout of dip-buying dragged them back up to close lightly in the green. Stocks completed their eighth consecutive week of gains on Friday, the longest such streak for three years, as longer term interest rates and energy prices continued to recede on the hopes of some kind of a US/Iran settlement ticked a little higher based on still-hazy but slightly more upbeat pronouncements from both sides. Some other things I’m thinking about ..* For AI-driven stock market growth to be sustainable the biggest tech companies will need to see a positive return on their colossal data center spending. If this fails to materialize because people and companies don’t use AI as much as expected or pay for its use, then the so-called hyper-scalers (Meta, Amazon, Oracle, Microsoft, Google etc.) will have to cut spending on them and that could badly damage the rest of the tech sector and thereby the tech-heavy US indexes. We won’t find out that out in the near term, but stock markets are currently acting like the answer can only be “yes, the spending will continue come what may,” and I’m not yet 100% convinced that’s definitely true beyond the next few quarters.* Trump’s job approval rating is cratering, consumer sentiment is at a horrendous multi-decade record low (even Republican voters are fuming) and inflation expectations are through the roof, just a few months before the midterms as Americans go into the Memorial Day long weekend with average gas prices above $4.50 a gallon, having spent an extra $20 billion at the pump in the last twelve weeks as a direct result of the Iran war. It is all this as much as anything else that might bring the conflict to some kind of a resolution relatively soon. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..“Evidence of a ferocious backlash against AI, especially among young people, is everywhere”. College grads just aren’t having it... AND I QUOTE ..“It’s not cost cutting; it’s replacing in some cases lower-value human capital with the financial capital and the investment capital we’re putting in.”Bill Winters, CEO of Standard Chartered Bank, was widely slammed for this clumsy quote last week, describing the bank’s employees as “lower-value human capital”. LAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.0% last week, is higher by 4.2% over the last three months and is up 5.7% so far this year. * IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 2.9% last week, is higher by 7.4% over the last three months and is up 13.2% so far this year.* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 1.4% last week, is higher by 4.1% over the last three months and is up 10.1% so far this year. INTEREST RATES:* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)* 3 MONTH TREASURY ⬇︎ 3.68% (3.69% a week ago)* 2 YEAR TREASURY ⬆︎ 4.13% (4.09% a week ago)* 5 YEAR TREASURY ⬆︎ 4.27% (4.26% a week ago)* 10 YEAR TREASURY *** ⬇︎ 4.56% (4.59% a week ago)* 20 YEAR TREASURY ⬇︎ 5.06% (5.14% a week ago)* 30 YEAR TREASURY ⬇︎ 5.07% (5.12% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending. *** Used as a basis for determining mortgage interest rates.AVERAGE 30-YEAR FIXED MORTGAGE RATE:* ⬆︎ 6.51%One week ago: 6.36%, one month ago: 6.24%, one year ago: 6.86%Data courtesy of the Federal Reserve Bank of St. Louis.INTEREST RATE EXPECTATIONS:<...

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Meaningless Drivel.

May 1700:06:59Tap to summarize

Trump decided over the weekend that he“didn’t like” Iran’s response to the US proposal to end the conflict but yet again there was little of substance regarding the war for Wall Street to focus on, with markets continuing to view the situation as slowly trending towards some kind of ceasefire. The Strait of Hormuz has been closed for ten weeks now with no prospect of reopening, a once-unthinkable shock to the world economy and yet the oil price came into the week still well below the high of $140 seen in 2022 (Russia/Ukraine) and global stocks at all-time highs. US stocks hovered around those highs at the open on Monday with Trump describing the current pause in Middle East hostilities as being “on life support” and continued rising energy prices keeping a lid on the recent melt-up, but the indexes still managed to inch forward a touch. Hence, more new all-time record levels. The latest CPI report on Tuesday morning was the first to fully include higher fuel costs brought about by the war and inevitably showed another big leap in retail inflation to 3.8% annualized, closing in on double the Fed’s 2% target (which it hasn’t met for five years now). Gas prices are up by 28% from a year ago and airfares by 21%. Notably, retail prices are now rising at a faster rate than wages. Interest rates shifted upwards on the vanishing prospect of any rate cuts at all in 2026 or early 2027. Indeed, an increase in the Fed Funds Rate this year is now priced as being more likely than a rate cut. Wall Street winced at the data and the indexes pulled back and interest rates jumped. Trump arrived in Beijing on Wednesday morning for a meeting with Chinese premier Xi after bizarrely telling journalists; “I don’t think about Americans’ financial situations”. Kevin Warsh was waived through Congress as the next Fed chairman and was immediately confronted with a big problem. CPI’s baby brother, PPI, was released pre-market and came in red hot, indicating a jaw-dropping jump from 4.3% to 6.0% in the annualized wholesale rate of inflation. The bond market was shocked and drove up medium and longer term interest rates. The 30-year Treasury rate blasted through 5.00% to its highest level since 2007, before the Great Financial Crisis. Stocks, however, took things in stride and tech stock traders in particular stepped in to buy Tuesday’s dip, pushing the indexes into the green and back to yet more record highs. By the time markets opened on Thursday, all that had come out of China was meaningless drivel about partnership and obscure references to Confucius and Abraham Lincoln. Of far more interest was the latest Retail Sales data which showed continued steady, if not profligate, spending by the US consumer. Despite the continued lack of anything interesting emanating from Beijing, stocks continued to move relentlessly higher, helped by a spectacular earnings report from Cisco. The major indexes reached their third set of all-time record highs of the week with the S&P 500 closing above 7500 for the first time ever and even the silly old dinosaur index that is inexplicably still followed by some people, the Dow Jones Industrial Average, broke through 50,000. The complete nothing-burger that was the Trump/Xi summit came to an end on Friday with muddled messaging from the US delegation and no apparent progress on Iran or tariffs. After a horror-show of a trading session in Europe with stocks and bonds plunging as local interest rates reached multi-decade highs and continued rising energy prices, US equity indexes cooled off as stock traders finally joined bond traders in fretting about inflation risk and took a lot of money off the table. Some other things I’m thinking about ..* I think it’s important to identify and recognize what could go wrong here for stock markets. To be clear, these are possible scenarios, not predictions .. * Fed hikes interest rates: For the first time in years, the market-driven probability of a Fed Fund Rate increase by year-end is now higher than that of a cut as inflation continues to be a major and growing problem, fueled by tariffs and the oil price shock. A forced rate-hiking campaign could cause a major economic slowdown. The last time the Fed had to raise rates to control inflation in 2022, stocks dumped by more than 20%.* Stagflation materializes: It is the expected duration rather than the intensity of high inflation that matters. The longer energy prices stay high, the more entrenched elevated inflation will become, fueling possible stagflation and unlike in COVID-times, there will be no stimulus checks this time to help offset it. * The AI boom goes bust: Earnings reports have indicated colossal AI spending from a narrow group of tech companies that is potentially driving wider economic and corporate growth. If that expenditure were to be forcibly slowed due to poor investment returns, then the platform upon which a three-and-a-half year rally has been built could begin to crumble and many other sectors might be adversely impacted. * None of these three risks are imminent and the market is fundamentally strong. But stocks can go down, sometimes sustainably and I don’t want clients to be blindsided if it happens. Absent some kind of exogenous shock, any major decline is likely to be the result of one or more of these factors. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..“Your ability to take risk throughout your financial life will be influenced by three primary factors—your age, your liabilities and your level of wealth. As each increases, you should naturally want to take less risk.”Maybe counterintuitive? Yes. Very sensible? Also yes. Important advice from Ritholtz’s Nick Maggiulli... AND I QUOTE ..“Risk management is less about how you respond to risk and more about recognizing how many things can go wrong before they actually do.”Morgan Housel, partner at The Collaborative Fund. LAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPYM, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 0.2% last week, is up 8.4% so far this year and ended the week 1.4% below its all-time record closing high (05/14/2026). * IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 2.3% last week, is up 12.8% so far this year and ended the week 3.5% below its all-time record closing high (05/06/2026).* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price fell 2.7% last week, is up 10.2% so far this year and ended the week 3.1% below its all-time record closing high (05/06/2026). INTEREST RATES:* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)* 3 MONTH TREASURY ⬌ 3.69% (3.69% a week ago)* 2 YEAR TREASURY ⬆︎ 4.09% (3.90% a week ago)* 5 YEAR TREASURY ⬆︎ 4.26% (4.02% a week ago)* 10 YEAR TREASURY *** ⬆︎ 4.59% (4.38% a week ago)* 20 YEAR TREASURY ⬆︎ 5.14% (4.93% a week ago)* 30 YEAR TREASURY ⬆︎ 5.12% (4.95% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x...

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Vertical.

May 1000:05:48Tap to summarize

It was yet another weekend of nothing of substance war-wise for markets to chew on, apart from both sides ramping up the rhetoric and Trump posting some kind of characteristically detail-free vague promise called “Project Freedom” to somehow help guide tankers through the Strait of Hormuz. Markets were unimpressed. Oil prices and interest rates spiked higher on Monday and stocks fell back from their record highs following exchanges of fire for the first time in weeks as we all got an unwelcome reminder that this war was not over. Cracks in the fragile ceasefire continued to appear on Tuesday but neither side seems to yet to have reached the pain level required to be willing to announce its demise. For the US, that pain level probably stands at around $160 oil, a 4.75% 10 year Treasury rate and even deeper midterm woes for Republicans. A buoyant risk-on stock market quickly recovered all of Monday’s losses, bolstered by Intel’s announcement of a deal with Apple. The indexes reached another new set of all-time highs. After the close, Advanced Micro Devices (AMD) released sensational earnings, Trump shut down Project Freedom after less than two days and the average price per gallon at US pumps reached $4.56, its highest level since the summer of 2022. Reports on Wednesday morning that the US and Iran were closing in on a one-page, 14-point Memorandum of Understanding and Secretary of State Rubio straight up telling Congress that the war was over sent oil prices and interest rates tumbling. Stocks went vertical with Wall Street traders keen to consign the conflict to the history books and finally get back to their happy place where they could focus on corporate earnings, interest rate projections and economic data rather than constantly having to try and interpret grammatically-challenged social media posts. The soaring rally spilled into Asia on Thursday with Japanese stocks in particular ripping higher, but wavered when markets opened in New York. Perhaps with one eye on the following day’s crucial employment numbers and in response to oil prices and interest rates slowing their declines from the previous day, Wall Street took its foot off the gas and the indexes closed in the red. After the close, the US Court of International Trade ruled Trump’s imposition of 10% across-the-board Section 122 tariffs to be illegal, just weeks after the Supreme Court tossed out his IEEPA tariffs. Further exchange of fire between the US and Iran overnight was dismissed by Trump as a “love tap” . But it did cast some doubt on the prospects of a deal and sent oil prices briefly higher again on Friday ahead of the pre-market Jobs Report which showed a significantly greater-than-expected number of new payrolls and an unchanged unemployment rate of 4.3%. This Goldilocks data confirmed a stable labor market and pushed back against fears of stagflation. Interest rates shifted lower and the stock indexes, boosted by another big day for Intel and several other semiconductor names, jumped again to wipe out Thursday’s losses and complete a sixth straight week of gains. The S&P 500 index notched its 15th new record high of the year (after almost 40 of them in 2025) and the NASDAQ scored its 11th. Some other things I’m thinking about ..* Market valuations are clearly stretched in the short term and there are still risks to monitor. But there are genuinely legitimate reasons for the new highs. So, while this market remains vulnerable to temporary downside air pockets on any US/ Iran disappointment, there are fundamentally solid financial positives to be found in the best earnings in over twenty years and a resilient US consumer that are supporting stock prices. While these factors remain in place, the risk of a major fall in the indexes is probably limited. But if they deteriorate, the drop from these levels has the capability to be dramatic. * Prediction betting markets at Polymarket, PredictIt and Kalshi are being pitched on social media as a lucrative side hustle for young Americans squeezed by rent and student debt. However, the reality is that almost all of them are losing money, with over 100,000 accounts on Polymarket down by at least $1,000. Trade records show that the bulk of profits were raked in by a tiny group of what appear to be automated bots while everyone else on the platform, in aggregate, lost $131 million. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..Various AI platforms were asked to create and manage a stock portfolio. It didn’t go well... AND I QUOTE ..“They’re literally running out of money at the end of the month.”Steve Cahillane, CEO of Kraft Heinz, referring to low-income US consumers facing tariffs, rising gas prices and stubborn inflationLAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPYM, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 2.4% last week, is up 8.2% so far this year and ended the week at its all-time record closing high (05/08/2026).* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 1.8% last week, is up 15.4% so far this year and ended the week 1.2% below its all-time record closing high (05/06/2026).* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 3.0% last week, is up 13.2% so far this year and ended the week 0.4% below its all-time record closing high (05/06/2026). INTEREST RATES:* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)* 3 MONTH TREASURY ⬆︎ 3.69% (3.68% a week ago)* 2 YEAR TREASURY ⬆︎ 3.90% (3.88% a week ago)* 5 YEAR TREASURY ⬌ 4.02% (4.02% a week ago)* 10 YEAR TREASURY *** ⬇︎ 4.38% (4.39% a week ago)* 20 YEAR TREASURY ⬇︎ 4.93% (4.96% a week ago)* 30 YEAR TREASURY ⬇︎ 4.95% (4.97% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.** Wall Street Journal Prime Rate as of Friday’s close. Tending to move in lockstep with the Fed Funds Rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending. *** Used as a basis for determining mortgage interest rates.AVERAGE 30-YEAR FIXED MORTGAGE RATE:* ⬆︎ 6.37%One week ago: 6.30%, one month ago: 6.39%, one yea...

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Shooting Back.

May 300:06:58Tap to summarize

A potentially blockbuster week laced with pivotal earnings reports from almost $30 trillion-worth of S&P 500 names including five of the Magnificent Seven, key economic data and central bank interest rate decisions at home and abroad began following a weekend of no discernible progress on the Iran War. With limited credible conflict newsflow, Wall Street eased gently into the first half of the week on Monday, conserving its energy perhaps for a possibly more volatile second half. After solid sessions in Asia and Europe, US stocks essentially flatlined for the session but squeaked out just enough to notch more new all-time record highs for the S&P 500 and NASDAQ indexes. The Bank of Japan left local interest rates unchanged on Tuesday. Energy prices continued to climb with Strait of Hormuz traffic remaining at a standstill and the United Arab Emirates’ shock withdrawal from Saudi-dominated OPEC, raising the average price of a gallon of gas at US pumps to $4.30 and over $6.00 in California. Trump posting a picture of himself with a machine gun and the caption: “NO MORE MR. NICE GUY!” didn’t help. US stocks faltered, pulling back from their record levels with the NASDAQ reversing hardest on a Wall Street Journal report of trouble at OpenAI which sent tremors through some of the firm’s many tech partners and acted as a sharp reminder to investors to maintain portfolios that are balanced across sectors. Big Wednesday arrived with a Fed Funds Rate-setting announcement on tap followed by Jerome Powell’s final press conference as chairman and a tsunami of monster earnings after the closing bell. The Fed obviously did nothing with interest rates but a split is clearly emerging on the committee between those looking to maintain a bias towards only focusing on cutting rates in the near future and other members looking for more symmetrical and flexible language that at least leaves the door open for possible interest rate hikes in response to the increasing inflation pressure brought about by tariffs and war. In a lively press conference, Powell confirmed that he would stay on as a Fed governor once his chairmanship expires later this month, infuriating Trump. The indexes ended the session a little lower. Broadly speaking, the earnings reports were graded by Wall Street as follows: * Alphabet/Google: Excellent job all round. A gold star for the teacher’s pet.* Microsoft: Could do better on AI service offerings. We aren’t angry, just a bit disappointed.* Meta: Overspending yet again on unproven, kinda strange stuff. You have to rein it in and we likely won’t be happy until you do.* Amazon: Revenues growing nicely, good work. But we do need to keep one eye on that spending of yours. Long term US interest rates joined oil prices in touching wartime highs (5.00% on the 20-year and $126 respectively) on the last day of the month on Thursday before pulling back a little, continuing their non-confirmation of recent stock market exuberance (see below). Central banks in Europe and the UK held local interest rates unchanged. Q1 US GDP estimates came in stronger than expected, sending the indexes shooting back to new record highs again despite the mixed tech earnings and the PCE index showing inflation continuing to run hot, soaring from 2.8% to 3.5% annualized, the biggest month-on-month increase for years. The S&P 500 scored a 10% jump for the month of April, its best monthly performance since 2020. The Small Cap index and the NASDAQ did even better; up 12% and 16% respectively. Apple reported after the close, beating expectations on most metrics but didn’t blow the doors off and the stock price shifted moderately higher on Friday as stocks began May as they had ended April by marching deeper into record territory with the S&P 500 index now on a five-week winning streak. Some other things I’m thinking about ..* I talked in last week’s report about the divergence between stock market performance and consumer sentiment. Another notable divergence is the one between stock market performance and that of other financial markets. Put simply, compared to the day the ceasefire was declared on April 7th, energy prices are now much higher, as is the 10-year Treasury yield. The S&P 500 index, meanwhile, has surged 9% over the same time frame. * To be clear, this lack of confirmation by oil and interest rate markets doesn’t mean that the rally in stocks is illegitimate. The strong earnings and solid economic data upon which it is based are real. Stock markets are assuming that the war has passed peak intensity and we are at least on a road to some kind of resolution. But neither oil nor interest rates are signaling that and this non-confirmation can be spun one of two ways. * Positively, it could mean that good earnings and economic data are so strong that they are swamping geopolitical concerns, providing an effective offset to event risk. Negatively, it could mean that the stock rally has simply been fueled by “fast money chasing” that has sent mega-cap tech stocks spinning higher on little more than general hope of a resolution and that there is a non-trivial risk that this could all reverse quickly and nastily. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.ARTICLE OF THE WEEK ..“Just three months stand between the average American household and bankruptcy.” The death of the American Dream is now official... AND I QUOTE ..“The stock market isn’t always right, but it’s right far more often than any of us trying to predict what will happen next.”Ben Carlson, Ritholtz Wealth ManagementLAST WEEK BY THE NUMBERS:Last week’s S&P 500 market color courtesy of finviz.com* SPYM, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.0% last week, is up 5.7% so far this year and ended the week at its all-time record closing high (05/01/2026).* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 1.0% last week, is up 13.5% so far this year and ended the week at its all-time record closing high (05/01/2026).* VXUS, an International Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 0.6% last week, is up 10.0% so far this year and ended the week 1.8% below its all-time record closing high (04/17/2026). INTEREST RATES:* FED FUNDS RATE * ⬌ 3.625% (unchanged from a week ago)* PRIME RATE ** ⬌ 6.75% (unchanged from a week ago)* 3 MONTH TREASURY ⬇︎ 3.68% (3.69% a week ago)* 2 YEAR TREASURY ⬆︎ 3.88% (3.78% a week ago)* 5 YEAR TREASURY ⬆︎ 4.02% (3.92% a week ago)* 10 YEAR TREASURY *** ⬆︎ 4.39% (4.31% a week ago)* 20 YEAR TREASURY ⬆︎ 4.96% (4.88% a week ago)* 30 YEAR TREASURY ⬆︎ 4.97% (4.91% a week ago)Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close.<strong...

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