Issue #13: 🚀 Breaking Market Milestones

Read Time: 7 mins

What’s in this issue

In today’s issue we unravel how optimism swept the S&P 500 to new heights, and why epic trade dialogues between the U.S. and China are capturing global attention.

We’ll bring you eye-opening perspectives on the evolving tech sector and the potential of Bitcoin to challenge traditional currencies.

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Weekly Movement

S&P 500: Up 1.5% for the week, closing above 6000 and marking its second consecutive weekly gain.

FTSE 100: Up 0.8% for the week, ending higher after positive economic data and a strong finish on Friday.

The chart below illustrates the daily percentage changes for both indices throughout the week:

What is Moving the Markets This Week

Wall Street wrapped up a strong week with the S&P 500 closing above 6,000 points for the first time since February, fuelled by optimism over positive trade developments and encouraging labor market data.

After recent tensions, U.S. and Chinese leaders had what President Trump called a “very good phone call,” with both sides agreeing to continue trade talks in London on June 9. On the jobs front, April saw higher-than-expected job openings, while May’s nonfarm payrolls report beat forecasts, even as private hiring slowed to its lowest pace since March 2023.

The week also featured a standout IPO from Circle, whose shares more than doubled in their New York Stock Exchange debut. By week’s end, the S&P 500 was up 1.5%, the tech-heavy Nasdaq rose 2.2%, and the Dow added 1.2%.

Jobs Data & Fed Rate Cut Outlook - A stronger-than-expected May jobs report (139,000 new jobs) has reinforced expectations that the Federal Reserve will delay interest rate cuts, with most investors now seeing the first cut in September at the earliest.

Tech Sector & AI Momentum - Technology stocks, especially those tied to artificial intelligence, have outperformed, buoyed by upbeat earnings and news like Meta’s long-term energy deal for AI operations.

Small-Cap Outperformance - Small-cap stocks led the market last week, outperforming large-caps, though they still lag year-to-date.

Market Volatility Drops - The Cboe Volatility Index (VIX) fell for the eighth time in nine weeks, signaling a return to market calm after recent turbulence.

Trump Blames Elon Musk’s Criticism on Decision to Cut Electric Vehicle Tax Credits

President Donald Trump recently responded to criticism from Elon Musk by blaming Musk’s negative comments on Trump’s decision to cut electric vehicle (EV) tax credits.

Trump claimed that Musk, who leads Tesla, is upset because these tax credits benefit his company. The disagreement highlights tensions between Trump and Musk, especially over policies affecting the electric vehicle industry.

Top Economic News

US Economic Growth Slows, Market Volatility Expected

The US economy showed a negative 0.3% GDP print in Q1 2025, mainly due to pre-tariff import surges. While Q2 may see a temporary rebound, underlying growth is expected to slow for the rest of the year. Rising Treasury yields and no imminent Fed rate cuts are keeping markets on edge.

ECB Cuts Rates Again, Signals Pause as Inflation Falls

The European Central Bank cut interest rates for the eighth time in a year, now signaling a pause as inflation has returned to its 2% target after years of overshooting. Policymakers are debating risks of inflation dropping too low.

German Economy Stagnates in 2025 Amid US Tariff Uncertainty

The Bundesbank forecasts that Germany’s GDP will stagnate this year due to uncertainty around US trade policy and tariffs, which are dampening industrial production and exports. However, fiscal stimulus and easing inflation are expected to drive growth from 2026 onwards

Looking Forward: What We Anticipate Next Week

Monday, June 9th

China Inflation Rate YoY (May)

Forecast: -0.2% | Previous: -0.1% Persistently low inflation or deflation signals weak demand and may prompt more stimulus.

China Balance of Trade (May)

Forecast: $70.0B | Previous: $96.18B A shrinking surplus could mean weaker exports or higher imports, affecting global sentiment.

China Exports YoY (May)

Forecast: -4.0% | Previous: 8.1% A sharp drop would indicate cooling global demand.

China Imports YoY (May) Forecast: -3.0% | Previous: -0.2% Falling imports reflect sluggish domestic demand.

Wednesday, June 11th

US Federal Budget Statement (May)

Forecast: -$312bn | Previous: +$258bn Reveals fiscal health; large deficits may impact borrowing costs and the dollar.

Thursday, June 12th

India Inflation Rate CPI YoY (May) Forecast: 3.16% | Previous: 3.72% Inflation trends will shape Reserve Bank of India’s rate outlook.

Friday, June 13th

Eurozone Industrial Production MoM (April) Forecast: 2.6% | Previous: -0.2% Key gauge of manufacturing health and business sentiment in Europe.

Earnings to Watch

Monday, June 9th: Casey’s General Stores, Calavo Growers, Lakeland Industries

Tuesday, June 10th: GameStop, J. M. Smucker, United Natural Foods, GitLab

Wednesday, June 11th: Oracle, Chewy, SailPoint

Thursday, June 12th: Adobe, Lovesac

Other notable reports: Kroger

Market Spotlight

US-China Trade Talks: Top US and Chinese officials meet in London Monday. Previous talks led to a surprise trade truce—investors will watch for any breakthroughs.

US Economic Data: May CPI and PPI reports due—critical for Fed rate expectations.

Apple WWDC 2025: Kicks off Monday, featuring major announcements and new software previews (iOS, iPadOS, macOS, watchOS, tvOS, visionOS).

Things I’m Paying Attention To

Only Room for One More Eurostar Rival, Says UK Regulator

The UK’s Office of Rail and Road (ORR) has concluded that there is capacity for, at most, one additional rail operator to join Eurostar at the crucial Temple Mills International depot in east London.

This depot is the only facility in the UK capable of parking and maintaining high-speed, cross-channel trains. With Eurostar facing the end of its decades-long monopoly, several contenders—including Virgin Group, Evolyn, and Gemini—are vying for a coveted spot.

The ORR has called for these prospective operators to submit detailed proposals, promising a swift and thorough assessment with a final decision expected later this year.

The decision will weigh factors such as operational readiness, economic benefits, and the impact on existing services.

Eurostar itself has acknowledged the depot’s limitations and supports the call for further investment in new facilities to unlock the full potential of international rail travel from the UK.

Coinbase CEO Warns Bitcoin Could Overtake Dollar as World’s Reserve Currency

Brian Armstrong, CEO of Coinbase, has issued a stark warning that Bitcoin ($BTC) could replace the US dollar as the world’s reserve currency if the US government fails to address its ballooning $37 trillion national debt.

This comes amid controversial legislation that extends tax cuts, increases military spending, and slashes social programs—moves criticised by Nobel laureates and business leaders alike for potentially exacerbating inequality and public debt.

Some US states, such as New Hampshire and Arizona, are already stockpiling Bitcoin as a hedge against possible dollar devaluation. The growing debt crisis is driving institutional interest in Bitcoin, prized for its fixed supply and resistance to inflation.

Critics argue that current fiscal policies may accelerate global efforts to reduce reliance on the dollar, signaling a potential shift in the international financial order.

Apple’s A20 Chip Packaging Marks a Breakthrough in Mobile Processing

Apple is set to drastically improve mobile performance with its upcoming A20 chip, thanks to a major breakthrough in chip packaging technology.

According to recent reports, the A20 will utilise advanced packaging techniques that allow for greater transistor density and improved thermal management.

This innovation is expected to deliver significant gains in processing power and energy efficiency, keeping Apple at the forefront of mobile silicon design.

The new chip will likely debut in future iPhone and iPad models, promising users faster performance, longer battery life, and enhanced capabilities for AI and machine learning tasks.

Apple’s continued investment in custom silicon underscores its commitment to pushing the boundaries of what’s possible in consumer devices.

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