James Brodie
Head of Learning & Development, Flux
US Hard Data on the Rise, Silver Corrects, China Posts Record Global Trade Surplus
US data (PPI, retail, homes); yields up, equities wobble, rotation to defensives. Trump calms Fed/tariffs/geopolitics; oil, silver slides
U.S. data continues to beat expectations with PPI (a CPI lead indicator) jumping markedly to +3.0% (est 2.7%), retail sales +0.6% MoM (est +0.4% ), and existing home sales jumped from 4.14M to 4.35M.
As yields edge higher and geopolitical tensions rise equities sit nervously on long term trend line support (Chart 1, Nasdaq). Rotation is clearly taking place into defensives, and the Magnificent Seven, which represent more than $20 trillion in market capitalization, are hitting new four-month lows relative to the S&P 500. (Meta -16% from all time high, MSFT -16%, NVDA -13%....... only Google sits at its highs. In fact, overnight NVDA is moved lower on word that OpenAI is signing an agreement to use Cerebras chips.
U.S. hard data continues to rise. The U.S. economy is strong, adding to the commodity demand and reducing the chance of Fed cuts going forward. (Chart 2, BofA Global research)
*TRUMP TO REUTERS: NO PLAN TO REMOVE POWELL
Silver has a quick 8% correction this morning on news President Donald Trump is holding off on new tariffs targeting imports of critical minerals, following a months-long review to determine whether foreign shipments threatened US national security.
CME Group to launch 100-ounce silver futures to meet record retail demand!
Oil prices fall -5% in minutes after President Trump says the “killings have stopped and there are no plans for executions” in Iran.
China just posted a record-breaking $1.2 trillion global trade surplus. The EU's is up 18.1%. Germany's numbers are staggering, a 108% surge in surplus, meaning that it now accounts for nearly a third of China's entire EU surplus. (Chart 3, FT)
Data today – U.S. jobless claims, Philly Fed manu index. The next key data is from China on Monday: GDP, IP, unemployment, retail sales and house prices. Key indicators for global growth (and new commodity demand!).
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