Macro markets entered rest mode after a very strong month, with the SPX up nearly 3% in May even as economic data softened and U.S. Treasury yields rose. In the past few days, the U.S. first-quarter GDP has been significantly lowered (1.6% → 1.3%), consumption has dropped significantly (2.5% → 2%), and core PCE has also been lowered (3.7% → 3.6%). At the same time, China’s economic data has also Returning to the old path, the manufacturing PMI in May fell sharply to below 50, significantly lower than market expectations (50.5). Production, demand, new orders, exports and imports were generally weak. The Hang Seng Index has also quietly fallen by 5% from its recent high. , basically flat this month.
There is a lack of clear conviction on the macro front, with price action driven primarily by month-end rebalancing, with commodities and stocks falling sharply yesterday, with U.S. stocks closing down about 1% on Thursday, with tech stocks such as Dell (-15%), Salesforce (-20%), and even Nvidia (-4%) seeing massive sell-offs. Affected by rebalancing, tech stocks have fallen nearly 9% compared to a 3% gain in the SPX, and technical indicators suggest that stocks could weaken further in the short term.
On the fixed income side, the U.S. Treasury yield curve has steepened significantly over the past two weeks (from -48 to -38) as markets suddenly turned their attention to a potential Trump second term, although both candidates Loose monetary policy and fiscal expansion plans may be implemented, but bond traders are more worried about bond supply and inflation under Trump's administration.
Furthermore, despite Trump being indicted and facing possible jail time for falsifying business records, a recent ABC/Ipsos poll in the US showed that only 4% of his supporters would withdraw their support even if he was convicted, while 80% pledged to continue their support, which is consistent with a previous poll that showed 94% of voters who supported Trump in 2020 intend to vote for him again in November, showing that his support base is extremely loyal and that this election is destined to be controversial regardless of the final result. The Manhattan court is scheduled to hand down its verdict on July 11, and Trump may appeal any ruling. There is no set timeline for other trials before Election Day on November 5.
There isn’t a lot to watch in the crypto space, with ETH outperforming BTC by about 0.8% this week, ETH’s inflows steady but lackluster, and the ETH S-1 approval date still unknown, with the market “consensus” suggesting July at the earliest. Meanwhile, native users have begun to turn to large memecoins like Shiba/Dogecoin and Pepe, which have seen gains of 10–20% in recent flat market conditions.
