#XPT #PALL #XAU #XAG up.. bonds &USD down / Israel-Iran risk, WTI up / Tax package, U.S deficit up by $4trn

Stéphan
May 21
4 min read

Markets : momentum on this Equity rally is stalling, valuations ignoring credit and higher yields (as it is quite clear that Trump and Bessent are pushing for higher deficit with the beautiful tax break package), trade deals are NOT coming through as Trump said (as usual), in fact UK stopping negotiations with Israel on trade deal, deadline looms in early July already (if Trump loses it again in 2-3weeks, you know deals are not being signed...and they will shout and increase tariffs again), Israel threatens Iran (Oil up..), EU, UK to sanctions Russia further (PALL could run..), USD, Bonds, U.S equity softer, not a good cocktail.. SPX500 5900+, DAX 24K+, QQQ 21k+ etc...reduce risk/re-hedge some exposure
#XPT that beautiful break out looks ''on'' now (see Ole's thread below)
Fed officials expect tariffs to boost prices; White House downplays risk
A fresh analysis from the Congressional Budget Office said the tax provisions would increase the federal deficit by $3.8 trillion over the decade, while the changes to Medicaid, food stamps and other services would tally $1 trillion in reduced spending. The lowest-income households in the U.S. would see their resources drop, while the highest ones would see a boost, the CBO said.
The 60% decline in the #VIX over the last 5-6 weeks is the biggest volatility crash in history, which fuelled he fastest rally in Eq in a long time, ever probably, >>> ALL it says is the market structure has changed for good, new world order, new paradigm etc, things shift very quickly...start again...time to look at plays going back the other way, ahead of the 90day deadline in early July, you can be sure all those 100+ deals won't be done...and deficits going to explode higher again with the big beautiful tax deal...
China debuts world’s first quantum cryptography system, claims it’s ‘unhackable’
The Atlantic: Trump spent 2 hours on the phone with Putin — and got nothing...Putin says he is “ready to work with the Ukrainian side on a memorandum for a potential future peace treaty…
The danger is that growth momentum (in China) may slip further: even putting aside the export sector, domestic demand now seems to be softening almost across the board.” Gavekal Dragonomics
FANNIE MAE DOWNGRADED TO AA1 BY MOODY’S, they had to, if the guarantor (U.S Govt) gets downgraded to AA1..
SCMP: "President Xi Jinping says self-reliance in advanced manufacturing is the right path for China and the bedrock for its future economic development."
WTI jumped after CNN reported that US intelligence suggested Israel is preparing to strike Iranian nuclear facilities
The budget includes $25bn for the ‘Golden Dome’ missile defence shield. Trump said it should be fully operational by the end of his term and may cost $175 billion (FT, BBG)