U.S. Producers Not Seeing As Much Inflation
1. In the U.S., while the consumer prices (CPI) has been trending up a little, inflation on producer level (PPI) isn’t showing much of that at the moment at least. So, that’s something.
PPI is up 0.7% since beginning of 2025. Up 2.3% over the last year.
Now, the big question really becomes if Fed has a reason to cut? U.S economy overall is still holding ok, and there aren’t as severe headwinds. Fed has very little reason to cut a lot. Sure, there will be one or maybe two cuts this year, but for Fed to cut hard, something really would have to break.
Canadian Housing Market
2. We continue to get more data on Canadian housing.
Remember: if it quacks like a duck, walks like a duck, then it’s a duck. Canadian housing market is in an outright correction (or maybe little bit more than that) with condo market (especially in Ontario) is in world of hurt.
Here’s what I can’t comprehend though; Canadians are highly leveraged, and mortgage debt is hands down their biggest debt. Housing is struggling, and unemployment rate is going up, with other headwinds (tariffs for example) are getting severe. Developers are dropping like rocks – receiverships, bankruptcies etc.
With all this, banks are ok? Or is it “Canadians will go hungry but pay their mortgage.”
Earnings & More
3. Just know that in the next few weeks, there will be tons of companies reporting their financial results for second quarter of 2025. While no one is expecting any major things for Q2 earnings, but its important to keep in mind what happens ahead.
Don’t forget stock market is a forward-looking animal. It cares a lot about what’s ahead than what has already happened.
I think tariffs will likely be the biggest keyword in all earning calls, but let’s see how it all goes. I will be paying close attention to projections. Q3 earnings growth for S&P 500 is at 7.3%, and its trading at 22.3X forward EPS (Factset)
Is Crypto Week Over?
4. I have been around long enough to understand how the news flow works, and by the time everyone is talking about something, it is already way too late for you to go in.
Now, the news flow told us that crypto week would be the best thing for crypto. Well, the anticipation of it took the crypto market higher, but guess what? The vote didn’t pass. The genius act will likely pass eventually, but now imagine had you bought $BTC at $123k, you aren’t very happy atm.
I can’t stress it enough: there’s a lot of garbage in crypto world. No, I am not saying bitcoin is going to zero. But, there are a lot of cryptos that will go to zero.
Gravitational Pull
5. Take a look at the yields on long-term US bonds. 30-year yields are getting close to 5%,.
Now, here’s what you need to know: U.S. yields have a sort of gravitational pull in the bonds market. When US yields start moving, other yields move too.
With this said, we are seeing yields everywhere going higher especially on the longer end. This could be something that creates problems. For Japan for example, will it hurt the carry trade? We know in the UK had issues few years ago.
It definitely something worth watching. It could impact a lot where the money goes.