Plenty of Buy-the-Dip excitement

Trial Balloons – Next Fed Chair thoughts

Excitement over China talks

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Warm-Up
- Trial Balloons - Next Fed Chair
- Everyone loves to hate China these days
- Trump and Musk breakup
- Your DNA may be for sale

Markets
- Retail shares have wide earnings outcomes
- Plenty of Buy-the-Dip excitement
- Excitement over China talks - Lutnik is showing the thumb-up
- Who is buying?

Powell Replacement
- President Trump considering naming Treasury Secretary Scott Bessent to succeed Fed Chairman Jerome Powell after his term ends in May 2026, according to Bloomberg
- Just floating the idea (Trial balloon) at this point - YES!
--- Proof - Wait 45 minutes:
- White House official tells Reuters that Bloomberg reporting is "false" that Treasury Secretary Scott Bessent is being considered for Fed Chair

China - Everyone loves to hate
- China’s May factory activity unexpectedly shrinks as tariffs dent sentiment — worst drop since 2022
- China’s manufacturing activity in May shrank at its fastest pace since September 2022, a private survey showed Tuesday, as a sharper decline in new export orders highlighted the impact of prohibitive U.S. tariffs.
- The Caixin/S&P Global manufacturing purchasing managers’ index came in at 48.3, missing Reuters’ median estimate of 50.6 and dropping sharply from 50.4 in April. It fell below 50, the mark that separates growth from contraction, for the first time since September last year.

China Eco

Who is Buying and Selling?
- When President Donald Trump set off a global stock market slump in April with the announcement of sweeping new tariffs, small investors across Asia rushed to the US stock market to buy the dip.
-Retail investors in South Korea turned net sellers of US equities in May for the first time since before Trump’s election victory, while Japanese accounts became net sellers of US exchange-traded funds, according to official data.
- The number of Singapore traders buying US stocks fell by a quarter in May from the previous period.

Trump Musk Divorce (Mutual Assured Destruction)
- Trump says Elon Musk went ‘CRAZY,’ suggests cutting government contracts for his companies
- “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote in a Truth Social post. ”I was always surprised that Biden didn’t do it!”
- Trump wished Elon "very well" in a presser on Monday night
- “I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump wrote in the social media post.
-- Musk fired back with pictures of Trump with Jeffrey Epstein and backed impeachment
- “I asked him to leave,” Trump claimed. Musk called that “an obvious lie.”
- - - - Does either one of these guys know the truth from a lie?
-- Telsa stock dove harder than Trump's ratings post election on the spat

BUT BUT
- Wasn't the point of hiring Musk and the DOGE to reduce waste, fraud and abuse?
- - Lots of positive thoughts on the job he was doing
- Now that he found waste in the Big Beautiful Bill - he is banished???

Palantir CEO
- CEO Alex Karp said the artificial intelligence arms race between the U.S. and China will culminate in one country coming out on top.
- “My general bias on AI is it is dangerous,” Karp told CNBC’s “Squawk on the Street” on Thursday. “There are positive and negative consequences, and either we win or China will win.”
- Either way - Palantir wins - right?

Select Retail
- Last week we saw shares of Dollar General move higher
- Lululemon shares hit the skids (we own this for clients) -
--- LULU eat Wall Street expectations for fiscal first-quarter earnings Thursday, but cut its full-year earnings guidance, citing a “dynamic macroenvironment.”

Central Banks
- India’s central bank delivered an outsized cut to its benchmark policy rate, bringing it to 5.5% from 6%, its lowest level since August 2022.
- This also marks a third straight rate cut since February, and comes below the median estimates of 5.75% in a Reuters poll.
- Expectations are for a GDP of 6.5% this year (was 9.2% last year)

US Employment
- Hiring decreased just slightly in May even as consumers and companies braced against tariffs and a potentially slowing economy, the Bureau of Labor Statistics reported Friday.
- Nonfarm payrolls rose 139,000 for the month, above the muted Dow Jones estimate for 125,000 and a bit below the downwardly revised 147,000 that the U.S. economy added in April.
- The unemployment rate held steady at 4.2%.
- U6 A more encompassing measure that includes discouraged workers and the underemployed also was unchanged, holding at 7.8%.
- Worker pay grew more than expected, with average hourly earnings up 0.4% during the month and 3.9% from a year ago, compared with respective forecasts for 0.3% and 3.7%.

Employment

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More China - Just in...
- China consumer prices slump again, deepening deflation worries as demand stays weak
- China’s consumer prices fell for a fourth consecutive month in May, as Beijing’s stimulus measures appear insufficient to boost domestic consumption, with price wars in the auto sector adding to downward pressure.
- The consumer price index fell 0.1% from a year earlier, according to data from the National Bureau of Statistics released Monday, compared with Reuters’ median estimate of a 0.2% decline.
- CPI slipped into negative territory in February, falling 0.7% from a year ago, and has continued to post year-on-year declines of 0.1% in March, April, and now May.

Goldilocks
- Jensen Huang (NVDA) poured praise on the U.K. on Monday, promising to boost investment in the country’s artificial intelligence sector with his multitrillion-dollar semiconductor company.
- “The U.K. is in a Goldilocks circumstance,” Huang said, speaking on a panel with Briti...