A parade of pauses

WAR! Middle East at it again

Oracle earnings – wow!

Tesla robotaxi spotted

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** Look At Album Art ** - So bad

Warm-Up
- More pausing floated
- We have a CHYNA deal - kind of
- Saying goodbye to Brian Wilson
- Tesla - back in buy mode

Markets
- War! Middle East again (US seems to be helping ?)
- Within 2% if ATH and then...
- Oracle blows the roof off
- UK economy shrinks - bigly

***A NEW Closest to the Pin!

Middle East Again
- Israel launched a series of airstrikes against Iran early Friday morning local time, targeting locations it said were related to Iran’s nuclear program, sparking market fears of a wider conflict.
- Mohammad Hossein Bagheri, chief of the Iranian Armed Forces and the country’s most senior military official, was killed during the strikes, alongside the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps, Hossein Salami, Iranian state media reported.
- The Israeli airstrikes also targeted and killed two of Iran’s leading nuclear scientists, Fereydoun Abbasi-Davani and Mohammad Mehdi Tehranchi, according to Iranian news outlets.
- Odd timing?
- Markets initially took it better than expected - until Iran stuck back

Valuations
- As of the most recent update on June 5, 2025, the forward P/E ratio of the S&P 500 is 21.70. This reflects a decline from 22.44 in the previous quarter and 25.20 one year ago, 10 -year average is about 19

PE Forward Chart

Something we discussed on TDI
- Presidential Cycles
- The U.S. stock market tends to follow a four-year cycle aligned with presidential terms. Historically, the first year of a president’s second term (4 years apart in this case) often mirrors the first year of a new presidency in terms of market behavior—marked by uncertainty, policy re-calibration, and sometimes muted performance
- While the first half of the first year can be choppy due to post-election adjustments and early policy moves, the second half—especially Q4—has historically shown stronger performance. This is often attributed to:

Stabilizing policy direction after early-year volatility
Investor optimism around fiscal planning and budget cycles

Seasonal tailwinds like the holiday rally and year-end portfolio rebalancing

Presidential Cycle

UK Economy- This is why we need to dig further than the headline (more beneath the surface)
- The U.K. economy shrank sharply in April as global trade tariffs and domestic tax rises kicked in, data showed Thursday.
- The latest monthly growth figures from the Office for National Statistics showed the U.K. economy contracted 0.3% month on month in April, following growth of 0.2% in March.
- It was also more than the 0.1% fall economists were expecting.
- “After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States with decreases seen across most types of goods, following the recent introduction of tariffs,”
--- The real culprit:
----- Domestic tax rises have also been blamed for the steep decline in economic activity. British businesses have been confronted with an increase in national insurance contributions and rise in the minimum age from the start of April, while a temporary tax break on property purchases also came to an end in March.
- ----The change in the Stamp Duty Land Tax (paid when buying property or land) in April meant there was a decrease of 63.5% in U.K. residential property transactions from the previous month, the ONS noted, with buyers rushing to complete purchases before the tax break ended.

US Economy
- U.S. consumer prices increased less than expected in May as cheaper gasoline partially offset higher rents, but inflation is expected to accelerate in the coming months on the back of the Trump administration's import tariffs.
- Consumer price index increases 0.1% in May
- Foods prices rise 0.3%; but eggs a bit cheaper (eggs discussion)
- CPI advances 2.4% year-on-year
- Core CPI gains 0.1%; increases 2.8% year-on-year

CPI Chart

Oracle Earnings
- Stock goes vertical
- Shares rose about 13% Thursday after the software maker reported results that exceeded Wall Street estimates and signaled that cloud growth will accelerate.
Here’s how the company did in comparison with LSEG consensus:
- Earnings per share: $1.70 adjusted vs. $1.64 expected
- Revenue: $15.9 billion vs. $15.59 billion expected
- Revenue increased 11% year over year during the fiscal fourth quarter, which ended on May 31, according to a statement.
- Net income rose to $3.43 billion, or $1.19 per share, from $3.14 billion, or $1.11 per share, in the same quarter last year.
- Cloud infrastructure revenue should increase more than 70% in the 2026 fiscal year, up from growth of 52% in the quarter, CEO Safra Catz said on a conference call with analysts.
- She called for more than $67 billion in fiscal 2026 revenue, compared with the LSEG consensus of $65.18 billion.

Tesla
- Stock back in buy mode
- After the "fight" Elon back in the CEO Chair
- RoboTaxi carrot being used
- Austin - 2 Robotaxi's been spottted
- Will use their own ride hailing service (Uber, Lyft repercussions?)
- ELON: "These are unmodified Tesla cars coming straight from the factory, meaning that every Tesla coming out of our factories is capable of unsupervised self-driving!"

Amazon
- Amazon is now restructuring its health business, stating that Amazon Health Services will be divided into six new units, with a goal of creating a simpler structure.|
Amazon Clinic: (now Amazon One Medical Pay-per-visit): A virtual care service for common conditions, allowing patients to consult with doctors online.
One Medical: A concierge primary care clinic, offering membership-based access to virtual and in-person care, including same and next-day appointmen...

DHUnplugged #757: Storm Alert

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