The strong labor market report from last week gave markets a solid boost early in the week. After exchanging insults—pedophile and junkie, no less—Trump and Musk finally called a truce. The richest man repented, the most powerful man forgave, and both returned to their respective hobbies, hopefully no longer interfering with each other.This is a quick review from Ivan Kompan, Edinburgh Business School analyst.
The Consumer Price Index (CPI) came in lower than expected, which was a pleasant surprise, though some investors remain skeptical—perhaps the delay in tariffs merely postponed the inevitable rise in prices. The Producer Price Index (PPI) also undershot forecasts, further fueling optimism and pushing markets close to record highs seen back in February. Wall Street strategists quickly jumped back on the bullish bandwagon, talking up S&P 500 targets of 6,300–6,500 by year-end. Of course, one missile strike from Israel or a collapse in trade talks could flip the narrative overnight.
Speaking of conflict, the Middle East remains a geopolitical wildcard. Scenarios range from “Iran fires a symbolic salvo and we move on” to “World War III knocking at the door.” One thing’s clear: only Trump can save us now. If he’d been in charge during the founding of Israel or the Iranian revolution, we wouldn’t be in this mess—according to Trump, anyway.
Meanwhile, the trade war is merely on pause. The tariff grace period ends July 9, with no deals in sight. Trump says new tariffs are coming within a week or two. Treasury Secretary Bessent, however, suggests the pause will continue for “cooperative” trade partners. Mixed signals like these do little to calm investors. Talks with China remain unproductive—and what if they collapse entirely?
Then there’s the monetary front. After the CPI surprise, Trump went after Fed Chair Powell again: “I may have to force something,” he said—but promised not to fire him. A new Fed head can’t be officially appointed before May 2026, but a “shadow chair” doing Trump’s bidding? That’s more than likely. Rumor has it Bessent is a top contender.
On the corporate front, Tesla promised robotaxis by June 22, Oracle and Adobe delivered strong earnings, while Apple underwhelmed at WWDC with its aging Siri and little else—hardly impressive in the AI age.
And one troubling signal: insider selling is on the rise. According to Washington Service, the insider buy/sell ratio dropped to 0.26—the lowest since last November. When company leaders are cashing out, it’s rarely a sign of untapped upside.
What’s next? Even without missiles flying in the Middle East, the outlook isn’t exactly rosy. War only adds fuel to the fire. Will cautious investors really pour money into overvalued assets in such a tense climate? Maybe not. Then again, the army of “markets only go up” believers is a powerful force—perhaps strong enough to keep the rally going, panic or not.
*And finally, we would like to remind you that the information you have just listened to is not an investment advisory. Remember – investments in the stock market are always tied up with financial risks. So be careful and cautious.
