Legal, economic, and political uncertainties are intensifying under President Trump.

Just one day after accusing China of violating a key trade agreement, Trump announced a doubling of tariffs on imported steel and aluminum, from 25% to 50%, effective June 4.

Tariffs continue to dominate headlines, with hardly a week passing without a new development. This week, the issue moved into the courts. Legal challenges now question the legitimacy of reciprocal tariffs and whether the authority to impose them lies with the President or Congress. Both parties have until June 9 to present their arguments.

At the same time, June will be pivotal for global monetary policy. Decisions are due from the ECB, the Federal Reserve, and the Bank of Japan. Meanwhile, the Swiss National Bank could surprise markets with a reintroduction of negative interest rates.

Inflation remains persistently high in both Europe and the US, and new tariffs may add further upward pressure.

Markets: Weekend futures across Asia, Europe, and the US are pointing lower. Cryptos are also trading lower, suggesting a weak opening to the new trading week.

My view: Markets are navigating a sea of uncertainties. Yet, despite escalating trade tensions and a steady stream of negative news, investor sentiment remains remarkably upbeat. The market continues to shrug off potential downside risks, especially on the tariff front.

A key reason: many investors are still betting on the so-called “TACO” trade - ”Trump Always Chickens Out”. This strategy is built on the assumption that Trump may posture aggressively but ultimately softens or reverses his stance. That belief helped fuel one of the strongest months for US equities in May, the best since November 2023.

I chose not to follow that speculative crowd. From my perspective, the economic impact of recent policy decisions is already more severe than markets are pricing in. Valuations appear increasingly stretched. The real question is: what will break the current euphoric mood? And how long will speculators continue to chase elevated valuations in the face of mounting structural risks?

On Wednesday, the U.S. Court of International Trade in New York ruled that nearly all of the tariffs imposed under Trump’s invocation of emergency economic powers were unlawful.
However, by Thursday, the US Court of Appeals in Washington temporarily overturned the New York ruling, granting only a provisional stay. The appellate court has now called for all parties involved to submit further legal arguments by June, signaling that the final verdict on the legality of Trump’s tariffs remains unresolved.

Markets: Equity indices continue with wider swings, Europe up today, while US Futures are trading flat, Asia in red this morning; Cryptos trading down, while US dollar is up and gold price trading around USD 3’300/os level.

My view: Tariffs remain a dominant topic, with uncertainty intensifying following the latest legal developments. As anticipated in my previous post, published yesterday, the market euphoria proved short-lived.

The rapid reversal of the court’s ruling underscores the ongoing legal and policy uncertainties surrounding US trade measures.
This back-and-forth creates significant challenges for companies operating globally, making it difficult to plan ahead.
Until a clear legal outcome is reached, the uncertainty around tariff policy will likely continue to weigh on investment decisions, many of which are now being set on hold and for sure being delayed. This hesitation will sooner or later show up in economic data and, in turn, will effect market sentiment in a negative way.

The US Court of International Trade has blocked the implementation of President Donald Trump’s so-called “Liberation Day” tariffs. The court ruled that, under the US Constitution, only Congress has the authority to regulate trade with foreign nations. The president’s emergency powers to protect the US economy do not override this constitutional mandate. By imposing blanket tariffs on imports from countries with trade surpluses against the US, Trump was found to have overstepped his legal authority.

The Trump administration immediately appealed the ruling within minutes of its release.

Markets: Global markets reacted positively. The US dollar gained, gold remained flat, and interest rates moved higher, with the 10-year Treasury yield rising above 4.52%.

My view: Markets remain highly news-driven, and the risk-on reaction and relief is not unusual. With the tariff story now in the hands of lawyers, market swings are likely to continue, depending on legal outcomes.
Trump's ambitious strategy to fund tax cuts through tariff revenues may be in serious jeopardy. As a result, US debt could soon return to the spotlight, a potential headwind for markets and overall risk sentiment. Therefore, this latest rebound could prove short-lived.

Nvidia has just released its fiscal Q1 2025 earnings, reporting revenue of USD 44.1 billion, a 12% increase from the previous quarter. This figure is slightly above the anticipated USD 43.3 billion. However, the company reported EPS of USD 0.81, below the analysts expected of USD 0.93, potentially due to the USD 5.5 billion inventory write-down stemming from US export restrictions on its H20 chips to China

Markets: No big market reaction so far; Nvidia +2.5% in after hours trading, Nasdaq Futures 100 points higher reflecting this move, however, negative for the day.

My view: Seems the market puts the focus on the revenues and not earnings figures as there is a slight positive reaction.
I keep my cautious stance on the AI sector. While Nvidia's growth story remains impressive, the current valuation seems to reflect high expectations for sustained AI demand. The impact of geopolitical factors, such as the export restrictions to China, underscores the uncertainties facing the company. Investors should remain vigilant. The investors’ sentiment can shift quickly away from the AI euphoria and a sell-off in the most crowded stocks like Nvidia and the Magnificent 7 can lead to losses very quickly.

European tariffs have been put on hold for another month, temporarily easing tensions and allowing more time to negotiate a trade deal. Without this extension, the tariffs would have taken effect on June 1.

Meanwhile, Swiss watch exports to the US surged by 149% in April. This sharp increase is largely the result of front-loaded shipments triggered by the Trump administration’s tariff announcements in early April. Excluding the US, total watch exports would have declined by 6.4% in the reporting month.

In New York, the number of investors betting against the market continues to grow. According to Goldman Sachs, 2.3% of the S&P 500 market cap is now positioned for lower prices, the highest level since fall 2019.

Markets: US and UK markets remained closed yesterday and are attempting to recover Friday’s losses. Interest rates have pulled back from recent highs, the US dollar is gaining back som ground, and cryptocurrencies are trading sideways following last week’s bounce. Gold is slightly lower but continues to trade above USD 3’300/oz.

My view: With short interest rising, the risk of a short squeeze is growing, especially if markets continue to climb, driven by selective optimism and the tendency to focus on positive data points.
Still, I align more with the short side. Markets appear to underestimate the broader risks triggered by tariff-related uncertainty and a potential halt in the investment cycle. The strong macro data for April should be interpreted with caution, as much of it likely reflects front-loaded activity in anticipation of policy changes.

Since this year’s low on April 6, markets have known only one direction: up. The sharp V-shaped rebound was primarily driven by inflows from retail investors eager to seize the opportunity to buy equities on lower prices. At the same time, volatility has faded, returning to lower levels.

However, this upward momentum stands in contrast to the macroeconomic backdrop, where negative headlines persist and uncertainty remains high. Warnings from both the economic and corporate fronts have been largely ignored. Notably seen in the market's muted reaction to the recent US credit rating downgrade, where losses were quickly erased.

The market momentum seems to continue, for how long?

Momentum investing: an investment strategy aimed at purchasing securities that have been showing an upward price trend or short-selling securities that have been showing a downward trend.

Markets: Equity markets see a bit of a consolidation today, interest rates going up on the long end, US dollar weak while gold is up. Cryptos sideways today with Bitcoin near all-time highs.

My view: Momentum investing, today’s market behavior seems increasingly driven by such strategies. My impression is that artificial intelligence and algorithmic trading tools are reinforcing these trends, attracting a higher number of speculators and amplifying market movements.
Is this becoming the new market regime?

Meanwhile, the tariff issue seems to have faded from attention. Many investors act as if the trade conflicts have been fully resolved, despite the reality that only two limited deals have been struck, one with the UK and a 90-day arrangement with China. Several tariffs remain in place, while key measures have merely been postponed until the end of June.

How long until the tariff discussion resurfaces and disrupts market complacency?

The US loses its last AAA credit rating. Yesterday evening, after market close, Moody’s announced the downgrade of the United States' sovereign credit rating, citing the growing burden of financing the federal deficit and the rising cost of rolling over existing debt amid high interest rates.

This move marks the end of an era: Moody’s had been the last of the “Big Three” rating agencies still holding the US at AAA (best Now it aligns with its peers—Standard & Poor’s cut the rating to AA+ back in August 2011, and Fitch followed in August 2023 with the same downgrade.

AAA rating: is the highest possible credit rating assigned by rating agencies like Moody’s, S&P, or Fitch. It signals that a country (or company) has an extremely strong ability to repay its debt, with minimal risk of default. In simple terms, it's like a perfect credit score for governments, indicating top-tier financial reliability and trustworthiness in global markets.

Markets: markets are closed - however seen, after-hours trading already reflected some nervousness with futures down and interest rates up, US dollar down while gold price moved higher. Crypto prices fall during weekend trading.

My view: The timing of Moody’s downgrade, just after market close and ahead of the weekend, is no coincidence. Releasing the decision late on a Friday likely aims to avoid an immediate, sharp market reaction. Investors now have the weekend to digest the news, with the first real test coming Sunday night when futures trading resumes.

The US is running a massive budget deficit as interest costs for Treasury debt continued to rise due to a combination of higher rates and more principal debt to finance. A scenario which is not sustainable and wich can not run endlessly.

Moody’s was the final holdout. With this move, the US has now lost its AAA rating from all major rating agencies. I still well remember the downgrade by S&P on August 1st, 2011, during Switzerland’s National Day and Swiss stock market closed, my options not tradable and worthless the next day, as global financial markets tumbled and investor confidence took a serious hit.

While today’s downgrade may not trigger the same level of panic in the short-term, it could very well disrupt the current wave of market euphoria. Investor sentiment has already shown signs of fragility, especially in April, when a broad sell-off in US Treasuries causing higher yields and a weaker dollar, raised fresh concerns about fiscal discipline. With this downgrade reinforcing those fears, markets may open next week in a far more cautious and volatile tone.

US consumers seem to become increasingly worried. The index of consumer sentiment dropped to 50.8, down from 52.2 in April, in the preliminary reading for May. Year-ahead inflation expectations rose to 7.3% from 6.5% last month, while long-term inflation expectations ticked up to 4.6% from 4.4%. The rise likely reflects growing concerns that recently announced tariffs will drive prices higher.

The CFO of Walmart addressed in an interview yesterday, that 30% tariffs are still to high, even with the recently announced trade deal to lower duties on imports from China to 30% for 90 days. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.

Markets: US indices continue their 5 day winning streak, US dollar up, while interest rates trading sideways between 4.4 to 4.5%.

My view: The US consumer is a critical pillar of the economy, accounting for nearly 70% of GDP through personal consumption. A sharp decline in consumer sentiment, paired with rising inflation expectations, is a clear warning signal. It suggests that households are increasingly concerned about their purchasing power, especially in light of the renewed tariff tensions. I share the view that expecting no price increases would be rather unrealistic.

If these concerns begin to curb consumer spending, it could weigh heavily on economic growth in the months ahead. One key question is whether consumers have already front-loaded their purchases in anticipation of higher prices, something we’ll only know in the near term.

For now, markets are completely ignoring these warning signs, which is typical behavior in phases of excessive market euphoria.

Yesterday’s inflation report came in below expectations. The US Consumer Price Index (CPI) rose by a seasonally adjusted 0.2% in April, bringing the annual inflation rate down to 2.3%, its lowest level since February 2021 and below the forecasted 2.4%. Core CPI, which excludes food and energy, also increased 0.2% month-over-month, with the year-over-year rate holding steady at 2.8%, slightly below the expected monthly increase of 0.3%.

Markets: Markets reacted positively with tech stocks leading the gains. The Nasdaq jumped 1.5%, US Treasury yields moved higher, with the 10-year yield approaching the 4.5% mark.

My view: Markets had braced for a hotter inflation print in April, given that it was the month when new tariffs were announced. However, most of these tariffs were ultimately put on hold, and many trade deals were settled in advance. As a result, a large volume of goods had already been pre-loaded in March, cushioning any immediate price impact.

A key contributor to the softer inflation reading was the sharp drop in energy prices. Crude oil fell from USD 72 to USD 58—an almost 20% decline. That said, in May, oil has already rebounded by nearly 10%. Should this upward trend continue or even persist at current levels through month-end, it will likely exert upward pressure on May’s inflation print.

At the same time, many macroeconomic indicators are currently being distorted by short-term effects. These temporary dynamics must be carefully considered when interpreting the latest data releases.

Last but not least, the April inflation data reinforces the Federal Reserve’s “wait-and-see” stance. With inflation still above target and no signs of urgency, rate cuts in the near term remain unlikely.

After days of teasing a major announcement, US President Trump announced he will sign an executive order mandating that Americans pay no more for prescription drugs than citizens in the countries with the lowest prices. He claimed this could cut US drug costs by up to 80%.
The initial announcement triggered a global selloff in pharmaceutical stocks. However, shares rebounded as details clarified the plan targets pricing gaps between countries, particularly in Europe, rather than directly cutting into pharma company profits.

Markets: Pharma stocks recovered yesterday and could even benefit from the broader risk-on sentiment, trading largely sideways today. In contrast, cryptos lose ground, as speculations and hopes that Trump’s big announcement could count for this sector quickly faded.

My view: The market remains highly news-driven. I continue to view the pharma sector positively due to its defensive characteristics. However, given lingering uncertainties and the potential impact of further policy details, I remain cautious. I’m maintaining a core allocation but, after the recent rally, I prefer to wait before increasing exposure.

The US and China have agreed to slash reciprocal tariffs from 125% to 10% for a period of 90 days, marking a major breakthrough in trade negotiations. The agreement was reached after high-level talks in Switzerland over the weekend. However, the US will maintain its separate 20% tariff on Chinese fentanyl-related imports, leaving China with an effective total tariff burden of 30%.

Markets: Markets responded with a euphoric move; US interest rates climbed alongside the US dollar, while gold took a hit and crypto prices fell sharply

My view: This deal came together surprisingly quickly after latest confrontation and is a step in the right direction, but it is far from a final resolution. The 90-day truce is temporary, and underlying structural issues remain unresolved. Policies have already changed several times and could shift again just as fast. Despite the market’s euphoric reaction, I see no reason yet to shift into a risk-on stance. Corporates have already taken damage amid prolonged uncertainty. Markets have already rebounded strongly, even surpassing pre-Liberation Day levels. I continue to follow developments closely and will reassess positioning as the situation evolves.

China’s exports rose by 8.1% year-over-year in April (in USD terms), significantly surpassing the consensus forecast of 1.9%. The upside surprise was driven by strong shipments to Southeast Asia and Europe, which surged by 21% and 8% respectively.

In contrast, exports to the US slumped by 21% as newly imposed tariffs began to take effect, according to customs data released today.

On the import side, volumes edged down just 0.2%, beating expectations for a much steeper 5.9% drop, suggesting a more resilient domestic demand than anticipated.

Meanwhile, US and Chinese trade officials are set to meet this weekend in Switzerland to explore options for de-escalating the ongoing trade conflict.

Markets: China stock indices were slightly positive this morning following the numbers’ release.

My view: Overall, I remain constructive on China. At this stage, it’s not surprising that the stronger-than-expected economic data has had limited impact on markets. Investor sentiment remains cautious, with most participants in a wait-and-see mode as the outcome of the trade conflict between the two largest global economies remains uncertain.

My portfolio maintains a significant allocation to Chinese equities, although I trimmed exposure slightly ahead of the sharp market correction in early April. Since then, I share the prevailing waiting stance, expecting a more favorable re-entry point going forward.

…between US and UK. US President Donald Trump unveiled a trade agreement this afternoon. The deal with the UK ist the first the US with a country whose imports were subject to new reciprocal tariffs imposed by Trump in early April. Many specifics about the deal were not immediately clear. Trump said, the deal includes “billions of dollars of increased market access for American exports,” and that the UK will “reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products.” The final details will be written in the coming weeks.

Key Provisions of the Agreement:

• Tariff Reductions on UK Exports:
  The US will reduce tariffs on British car imports from 27.5% to 10% for up to 100’000 vehicles annually and any additional vehicles face 25% rates. Furthermore, tariffs on UK steel and aluminum exports to the US will be eliminated, providing relief to these sectors.

• Increased US Market Access: The UK will lower its average tariff on US goods from 5.1% to 1.8%, enhancing access for American products, including beef, ethanol, chemicals, and machinery.

According to Trump, there should be more deals in the pipeline. A US delegation is traveling to Switzerland on coming weekend and will meet officials from China. Trump made also clear that 10% US tariffs is the minimum and a low number “Some will be much higher because they have massive trade surpluses.”

Before the announcement, early in the afternoon, the Bank of England (BoE) cut interest rates by 25bps to 4.25% as widely expected.

Markets: US stock indices gained while UK index FTSE 100 closed negative. US dollar gained together with US interest rates as well as the pound and UK interest rates. Cryptos saw a strong bounce with bitcoin again above USD 100’000 price level.

My view: The US President Donald Trump calls it a first “great” deal with a country previously subject to reciprocal tariffs. However, the 10% tariffs imposed on the UK during the so-called “Liberation Day” remain largely in place, with only a few categories exempted or subject reduced rates.

It took more than a month to finalize this agreement. On first side, a short time period for such a major trade deal. However, negotiations having been ongoing for several years.
Without more specific details, it is difficult to assess the broader economic or market implications. My initial reaction during the press conference was one of skepticism: where exactly is the “greatness” of this deal, and what is supposed to change. Particularly for financial markets or the many corporates in countries still left without any trade agreement?

Perhaps there is slightly less uncertainty now, and at least we have a rough framework that offers some insight into how future deals might be structured.

That is why I don’t share the current market euphoria, as I see clear signs of economic strain unfolding in the short to medium term.

As expected, the US central bank Fed holds interest rates steady at a range of 4.25% to 4.5% for the third straight meeting. Jerome Powell mentioned that the “uncertainty about the path of the economy is extremely elevated and that the downside risks have increased. The central bank also noted in its statement that the risk of higher unemployment and higher inflation has risen.
Jerome Powell further mentions that the central bank is not in hurry to cut interest rates and could wait and see the impacts of tariffs to the economy.

Following the Fed Press Conference, a report is saying that Trumps will end chip export restrictions (not confirmed by now). The chip restrictions wer scheduled to take effect on May 15.
Earlier, President Donald Trump said to reporters that he would not lower tariffs on China as a condition to begin trade talks. This morning both sides, the US and China, announced trade talks starting coming Saturday.

Markets: In a volatile trading US markets closed higher, interest rates down with the 10-year yield at 4.27%, gold price drops together with the oil price (-2%) while US dollar gets stronger

My view: Markets initially rose in early trading following the announcement of US-China trade talks. However, they turned negative after the Fed's statement, before rebounding into positive territory on news of a potential lift on chip export restrictions.

At this stage, investors appear to be trading on rumors rather than facts. In speculative periods, such a regime can persist longer than expected. However, it may ultimately come to an abrupt and sharp end. The question is, how many warning signals investors are going to ignore. The damage of the economy is real, with corporates reduced or even stopped investing already at the time of rising uncertainties around tariffs, even before the official announcement with the tariff board on April 2.

At this stage, investors seem to be trading on rumors rather than facts. In speculative environments, such a regime can persist longer than expected. However, it may ultimately come to an abrupt and sharp end. The real question is: how many warning signs will investors continue to ignore? The economic damage is already evident. Many corporations had scaled back or even halted investments amid growing uncertainty around tariffs, well before the official announcement by the tariff board on April 2.
In contrast to the COVID pandemic, when corporations swiftly ramped up production backed by substantial government stimulus, today’s environment offers no such support. Instead, companies face persistent uncertainty, with no clear path forward.

This is exactly why, in my view, the recent V-shaped rebound is difficult to justify.

Yesterday, Friedrich Merz was elected as Germany’s new Chancellor. The initial vote in the Bundestag failed. Merz could only secure the position in a second round of voting later that day. Germany’s federal election was held back on February 23. Subsequent negotiations led to a coalition agreement between the CDU/CSU and the center-left Social Democratic Party (SPD), which was signed on May 5.

Markets: DAX index took a hit, could recover from a 2% loss and is trading sideways today. Interest rates remained unchanged while the Euro regained some lost ground.

My view: As previously noted in several comments, I do not share the prevailing optimism surrounding Germany’s current path. A closer look at the political landscape reveals a fragile foundation for such confidence. The country's governance structure appears weak at its core, with many politicians still engaged in tactical maneuvering rather than addressing the pressing structural challenges facing the nation.

The new coalition government has outlined priorities including economic revitalization, increased defense spending, stricter migration policies, and long-overdue administrative modernization. A notable step has been the passage of legislation easing Germany’s constitutional debt restrictions to enable greater military investment.
However, these policy efforts are already being undermined by internal divisions within the coalition and the growing influence of the far-right AfD party. This dynamic raises serious concerns about the coalition’s stability and its ability to implement its agenda effectively in the near term.

While certain economic indicators have rebounded slightly from recent lows, the broader outlook remains subdued. Structural headwinds continue to weigh on growth prospects.

German blue chip stocks are currently trading near their all-time highs reflecting strong investor sentiment. Much of the recent strength in German equities appears driven by capital flows shifting out of the US and back into Europe, particularly into German names. This has also provided support for Germany’s small & mid Cap indices despite underlying economic concerns.

German small and mid caps had previously been among my most favored segments for building a position. However, I got surprised by the time and strength of this year’s rally, particularly its resilience following US President Donald Trump’s so-called 'Liberation Day'. We saw stock indices rebound in a sharp V-shaped pattern.
They have now fallen off that list. Persistent structural headwinds facing Germany—combined with valuations that no longer appear compelling, have led me to adopt a more cautious stance.

A busy week ahead for markets with earnings season to continue and potential news on tariffs:
- Fed decision on interest rates on Wednesday.
- OPEC+ decided to rise oil output
- Tariff announced for the movie industry, could impact Netflix.
- Trump says announcing tariffs for pharmaceuticals over the next 2 weeks.
- Tariffs on auto parts are now in effect - Ford suspends guidance for 2025 amid USD 2.5billion tariff impact

Markets: Asian markets closed this Monday, Europe indices up while the US stocks dropped together with cryptos, oil and US dollar currency while gold regained the level of USD 3’300.

My view: After the recent record winning streak, single stocks and overall markets can react very vulnerable to any news. The investor sentiment index turned to “greed” from “extreme fear” in only few days after remaining a record time period in the “extreme fear” area, back since end of February.
The market does not expect any rate cut. I share this view as the US central bank has no rush and big reason to lower rates even with mounting pressure coming from the White House.

Warren Buffett, the 94-year-old “Oracle of Omaha,” announced he will step down as CEO of Berkshire Hathaway by the end of this year. The decision was shared during the company’s annual shareholder meeting yesterday, marking the end of an era for one of the most iconic investors in history.

In the first quarter, Berkshire Hathaway reported a sharper-than-expected decline in operating earnings, reflecting ongoing market challenges. Buffett highlighted growing concerns over global trade tensions. “Trade should not be a weapon” and called it a “big mistake”. Buffet expects that tariff turmoils will weigh in and stressed the importance of patience in uncertain times -“You have to be patient”.

Berkshire’s cash hoard ballooned to a fresh record during the first quarter, showing that Buffett did not use the first-quarter drop in the stock market to deploy the money. In fact, Berkshire was a net seller of stocks for a 10th quarter in a row.Despite a volatile market in the first quarter, Buffett refrained from major stock purchases. Instead, Berkshire’s cash reserves swelled to a record high, underlining the company’s cautious stance. Notably, Berkshire was a net seller of equities for the 10th consecutive quarter.

Markets: -

My view: Warren Buffet’s remarks on trade and caution in the current environment strongly resonate with me. I also did not see the latest market dip as a buying opportunity and have remained on the cautious side. The sharp rebound we saw during the last week felt too fast, too far, and in my opinion, does not reflect the high number of unresolved uncertainties, from geopolitical tensions to economic risks through trade tensions.

China said it is evaluating the possibility of starting trade negotiations with the US. Chinese authorities reiterated that the US must remove all unilateral tariffs as a gesture of sincerity to create the conditions for meaningful dialogue.

On the macro front, the US nonfarm payrolls for April surprised to the upside, with 177’000 jobs added (est. 140’000).

Markets: Major stock market indices extend their gains, US dollar down while US 10-year yield is up and back at 4.3% level, cryptos with an upbeat move, Bitcoin price takes direction back to USD 100’000.

My view: The buy the dip dynamic continues. The S&P 500 index is on the way for a 9 day winning streak, longest since 20 years.

The "buy-the-dip" dynamic remains firmly in play, with the S&P 500 on track for a nine-day winning streak, its longest in over two decades.

I did not count with such a strong move, especially given the growing list of macro uncertainties and early signs of economic softening. Despite the momentum, I remain cautious and keep my portfolio allocation unchanged, as I still see a higher probability for renewed downside pressure ahead.

Microsoft and Meta both reported stronger-than-expected earnings after the market closed yesterday, providing a continued boost to market sentiment. Microsoft posted revenue of USD 61.9 billion for the quarter, up 17% year-over-year, driven by strong growth in its cloud segment. Meta reported USD 36.5 billion in revenue, a 27% increase year-over-year, and issued an upbeat outlook, helping offset concerns over rising capital expenditures.

On the macro side, latest US labor market data show the first signs of potential softening. The ADP Employment Change report showed private sector job additions of 62’000 in April, slightly below expectations of 115’000 and down from the downwardly revised 147’000 in March.
Weekly jobless claims rose to 241’000, up from 223’000 the prior week, more than the expected 225’000.

Markets: US Futures with a strong bounce, most European markest closed with Labor Day. Cryptos gain with risk on sentiment. Gold down 2% while US dollar regains some ground.

My view: The market is showing clear signs of “FOMO”, fear of missing out, especially evident in the strong post-earnings reaction of Microsoft and Meta. Both companies exceeded expectations, lifting Nasdaq Futures by nearly 2% overnight. Microsoft surged by 10%, pulling sentiment higher and fueling hopes among some investors that markets could “go to the moon.”

However, it's important to remember that Q1 earnings are backward-looking. The first tariff concerns emerged in March, with formal announcements coming in early April. The true impact of these trade disruptions will likely become clearer in Q2 results.

On the macro side, early signs of weakness are emerging. Recent consumer data and labor market indicators, including this week’s ADP employment and jobless claims, suggest a potential cooling in momentum.
Recent earnings from McDonald's highlight a cautious consumer environment. The company reported a decline in US same-store sales, marking its first drop since the early stages of the Covid pandemic.
From this point of view, it warrants a more cautious stance.

In such a wave of FOMO, the market rally may continue in the short term. With uncertainties remaining, volatility remains high, and in my view, downside risks are far from off the table.