Articles

Jamie Dimon:

• US should be taxing carry forward interest
• Not increase SALT deduction
• Says we are going to see a crack in the bond market.
• Don’t know if crisis will be in 6-months or 6-years.
• The Fed is right to give time to policy.
• The Fed has to wait and see.

This article was written by Greg Michalowski at www.forexlive.com.

The major European stock indices are closing mostly higher. The France’s CAC is the only decliner on the day.

A snapshot of of the closing levels shows:

• German DAX rose 74.04 points or 0.31% at 24007.28. For the trading week, the index reached a new record high of 24225.97. The index is up 1.6% this week
• France’s CAC felt -27.82 points are -0.36% at 7751.90. For the trading week, the index rose 0.23%.
• UK’s FTSE 100 rose 55.91 points or 0.64% at 8772.37. For the trading week, the index rose 0.62%.
• Spans Ibex rose 35.58 points or 0.25% at 14152.19. For the trading week, the index closed marginally higher by 0.34%.
• Italy’s FTSE 100 rose 104.41 points or 0.26% at 40087.39. For the trading week, the index rose 1.55%.

For the month:

• German DAX, +6.71% and represents its best months since January when the index rose 9.16%
• France’s CAC rose 2.08%
• UK’s FTSE 100 rose 3.27%.
• Spains Ibex rose 6.51%. The price high this month reached a new high going back to 2007
• Italy’s FTSE MIB 100 rose 6.60%. They price high this month reached its highest level since 2007

This article was written by Greg Michalowski at www.forexlive.com.

White House Chief of Staff Miller has been sent out to speak about China:

• China must show its commitment to a rules-based international order.
• Trump’s hope is that China will choose the path of cooperation and common ground.

This article was written by Greg Michalowski at www.forexlive.com.

Japan governments economy minister Akazawa met with US treasury secretary Bessent and Commerce Secretary Lutnick for 130 minutes:

• They agreed to accelerate trade talks, hold discussions again before G7 summit
• US and Japan have deepened understanding of each other’s positions, made progress towards a trade deal.

This article was written by Greg Michalowski at www.forexlive.com.

China’s US Embassy spokesperson:

• Both China and US have maintained communication over their respective concerns in the economic and trade fields on various bilateral and multilateral occasions at multiple levels.
• China has repeatedly raised concerns regarding US abuse of export control measures and semiconductor sector and other related practices.
• China urges US to cease discriminatory restrictions and jointly uphold the consensus reached at the high level talks in Geneva.

The comments are in reaction to/in response to the post from Pres. Trump this morning:

I am not sure there will ever be a solution. The US will not trust China. China will not give up all it does or its sovereignty. It might be that if Apple can’t produce in the US competitively, consumers go to Mexico or Canada to buy iPhones or gets them off smuggling boats off the coast of Florida.

This article was written by Greg Michalowski at www.forexlive.com.

• Preliminary 50.8. Last month 52.2
• Univ of Michigan sentiment final 52.2 vs 51.0 estimate
• Current conditions 58.6 vs 57.6 preliminary and 59.6 prior month
• Expectations 47.9 vs 46.5 preliminary and 47.3 prior month. 2nd worse for the year.

Inflation expectations:

• 1 year inflation expectations 6.6% vs 7.3% preliminary. Prior month 6.5%. Down from the preliminary.
• 5-year inflation expectations 4.2% vs 4.6% preliminary. Prior month 4.4%. A move lower for the month.

Joanne Hsu from the Univ. of Michigan says:

Consumer sentiment was unchanged from April, ending four consecutive months of plunging declines. Sentiment had ebbed at the preliminary reading for May but turned a corner in the latter half of the month following the temporary pause on some tariffs on China goods. Expected business conditions improved after mid-month, likely a consequence of the trade policy announcement. However, these positive changes were offset by declines in current personal finances stemming from stagnating incomes throughout May. Overall, consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future.

Year-ahead inflation expectations were little changed at 6.6%, inching up from 6.5% last month. This is the smallest increase since the election and marks the end of a four-month streak of extremely large jumps in short-run expectations. Notably, long-run inflation expectations fell back from 4.4% in April to 4.2% in May. This is the first decline seen since December 2024 and ends an unprecedented four-month sequence of increases. Given that consumers generally expect tariffs to pass through to consumer prices, it is no surprise that trade policy has influenced consumers’ views of the economy. In contrast, despite the many headlines about the tax and spending bill that is moving through Congress, the bill does not appear to be salient to consumers at this time.

China helped in the final readings

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices are trading lower to start the last trading day of the week end of the month. A snapshot of the levels currently shows:

• Dow Jones (DJI): 42,104.40, -111.33 (-0.26%)

• S&P 500 (SPX): 5,887.38, -24.79 (-0.42%)

• Nasdaq Composite (IXIC): 19,064.80, -111.07 (-0.58%)

For the trading week, the indices are up between 1% and 2%:

• Dow Jones, +1.22%
• S&P +1.48%
• NASDAQ index +1.73%.

For the month of May:

• Dow Jones, +3.56%
• S&P +5.74%. The gain equals the gain from November 2024. Move above that level and it would be the best month since November 2023.
• NASDAQ index +9.24%. That was the best month since November 2023 when the index rose 10.7%

This article was written by Greg Michalowski at www.forexlive.com.

Two headwinds that will make things look worse going forward.

A year ago tame PCE MoM data will fall off from the YoY calculation, putting upside pressure on the YoY levels.

• May 2024, 0.0%
• June 2024, 0.1%
• July 2024, 0.2%
• August 2024, 0.1%
• September 2024, 0.2%
• October 2024, 0.2%

3- month average: 0.1% 6-month average: 0.13%

For the core MoM over the next 6-months

• May 2024, 0.1%
• June 2024, 0.2%
• July 2024, 0.2%
• August 2024, 0.1%
• September 2024, 0.3%
• October 2024, 0.3%

3-month average of core PCE: 1.67%6-month average of core PCE: 0.2%

MoM gains of 0.2% or more for headline and core data will mathematically move the YoY up for the headline and the core measures.

This article was written by Greg Michalowski at www.forexlive.com.

USTR Greer is on CNBC and says:

• We have other tools if the tariff ruling goes the other way, as well

• Received emails and texts from foreign officials saying, “we are just going to keep negotiating with you as before.”

• Monitoring Chinese compliance — or non-compliance — with trade agreements.

• Expressed concern over China’s non-compliance, stating it must be addressed.

• Holds daily calls with the Indian Trade Minister.

• Has meetings next week with officials from Malaysia, Vietnam, and the EU.

• Noted the lack of expected flow of critical minerals from China.

• Can expand Section 301 tariffs if needed.

• On trade deficit: China is the biggest problem,

• EU is close behind.

• Will meet with EU official next week

This article was written by Greg Michalowski at www.forexlive.com.

• Priot month 2.6%
• Core PCE MoM 0.1% versus 0.1% estimate. Prior month revise to 0.1% from 0.0%
• Core PCE YoY 2.5% versus 2.5% estimate. Prior month revised up to 2.7% from 2.6%.
• PCE MoM 0.1% versus 0.1% estimate. Prior month 0.0%
• PCE YoY 2.1% versus 2.2% estimate. I month 2.3%
• PCE excluding food and energy 0.1% versus 0.0% last month
• PCE services prices ex energy 0.0% versus 0.2% last month

Looking at personal income and personal consumption:

• Personal income +0.8% versus 0.3% estimate. The prior month was revised higher to 0.7% from 0.5%. Strong income data.
• Personal consumption 0.1% versus 0.7% last month. Consumption adjusted 0.2% versus 0.2%

The personal income is a strong two months back to back. That is good for the consumer. The PCE data came in as expected.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior quarter 2.6%
• GDP MoM March 0.1% vs 0.1% estimate
• GDP QQ for Q1 0.5% vs 0.5% last (revised from 0.6%).
• GDP QQ annualized 2.2% vs 1.7% est. Last month 2.1% versus 2.6% previously reported
• GDP Implicit price QQ for Q1 0.6% vs 0.9% last month
• GDP YoY Q1 x.x% vs 2.36%
• GDP MoM Mar 0.1% versus 0.1% estimate. Last month -0.2%.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month -0.2%
• GDP Q/Q +0.5% vs 0.5% prior
• Advanced estimate for the month of April +0.1%

Exports of goods drove the growth in the first quarter of 2025, followed
by accumulations of business non-farm inventories. Higher imports and
weak residential structure resale activity tempered overall growth in
the first quarter.

This article was written by Giuseppe Dellamotta at www.forexlive.com.