Weekly US Market Rundown - 5/19-5/23

📈US Market Performance

As the weather gets better here in South Korea, with the birds chirping and the sun shining, things also got better for one of the greatest companies in the US: GE Vernova. All-time-highs consistently broken this week due to the golden shower of great news for its industry and the company itself, just never seems to end for it. A shame the same can't be said for the overall markets. (Source: GE Vernova - TVA Submits Application for GEV Nuclear SMR to US Nuclear Regulatory Commission, White House - Trump Orders NRC to Reform the Nuclear Industry)

As the Trump administration begins to apply pressure on the EU to force it to the table after claims that our neighbors across the pond are "stalling," President Trump "truthed" that the EU better take the trade negotiations seriously or face 50% tariffs starting next month. The president's warning shot did not miss, shooting down the US and European markets down from their recent recovery of prior trade tensions. The news caused the S&P 500 go down 2.6%, the NASDAQ and the Dow ended down 2.5% and the Russell at -3.5% A familiar taste everyone should be used to by now.

But you are wrong to think if President Trump only has foreigners in his crosshairs, the phone giant, Apple, was grazed as well. With the current Trump administration goal to have iPhones be made in the US, the threat of 25% tariffs on non American-made phones has been made which could take effect at the end of next month. This is also threatens the other phone making giants like Samsung and Huawei. (Source: Investor's Business Daily)

This comes as Apple began moving Chinese operations to India in an effort to avoid being canon fodder in the US-China trade war, only to be met with escalations between India and Pakistan. Although there is no known and immediate immediate direct threat from this event, any further escalations that could involve India and Apple could lead to supply chain disruptions. And, as a special bonus to take another bite at the apple, the company has been added to the list of tariff targets. My heart goes out to all of you Apple shareholders. 😔 (Source: Reuters).

🪙US Treasury Market

On the eve of the passage of President Trump's "One Big Beautiful Bill" passing through the House by one vote, the US Treasury market spiked due to concerns of reduced tax revenue with few meaningful spending cuts, primarily on longer-term bonds such as the 30-year reaching 5.15%. However, the after bondholders had sometime to digest the news, rates settled down to some extent after many fiscal hawks in the Senate came out stating that the bill does not go far in enough towards the end goal of a balanced budget.

The Republican Senate Majority Leader, Senator John Thune, recently said that many among the GOP senators want more spending cuts. That this is a "unique moment in time" to "control government spending." They have set their deadline for passage of the complete bill by July 4. But with the debt ceiling "x-date" approaching, the calls for more responsible fiscal actions will grow louder and louder. (Source: The AP News).

💡Earl's Economics

• This week, the Fed's most favored inflation index, the Personal Consumption Expenditures (PCE), is set to be released this upcoming Friday with the median estimate by analysts to be 0.1%. However, we have yet to see how much, if at all, tariffs impact this figure. (Source: Market Watch - Economic Calendar).

• With the return of added instability, gold has seen another runup, a smidgen above 5% this week. So far, gold has vastly outperformed the major indices with a rise of 28% year-to-date, reaffirming its reputation as a stable, defensive asset. Maybe I should start scraping out the gold from my electronics... 🤔(Source: Yahoo Finance).

⚖️Larry's Law

• In a surprise shoutout, the Supreme Court issued in a 6-3 decision stating that President Trump's removal of one member of the MSPB and one from the NLRB was lawful, but cutout an exemption for Fed Chairman Jerome Powell. This is a rare instance where the court resolves an issue that was not raised in the original issue at hand, so it seems that nation's money printer remains safely in his hands until the end of his term next May. Nevertheless, it certainly made investors in both US equities and bonds very happy and reassured. Maybe the justices are also watching their portfolios... 👀 (Source: Reuters).

• Think Apple’s troubles were over? Not quite. A judge in the Epic Games v. Apple case—stemming from a 2020 dispute over Apple’s 30% cut on in-game purchases—has now ordered Fortnite back on the App Store and found Apple in contempt for delaying its return. Epic had bypassed Apple’s fees with its own payment system, prompting Apple to retaliate by blocking updates, suing Epic, and removing Fortnite. The contempt ruling is now with the DOJ for possible criminal and civil charges. A big win for the squeakers. (Source: The AP News).

• Tucked away in Trump's "big beautiful bill" is an AI law stating that no state or other regulatory agency can enforce any AI regulation for 10 years. This would give the federal government sole power over AI regulation. This push is intended to prevent "overregulation" while AI is still learning how to walk. And trust me, there's NO WAY that anything bad will happen because of this 😁. (Source: The AP News)