[Macro Matters] 5/17 Weekly Briefing
1. Economic Data
Inflation Cooled in April; CPI Up 2.3% on Year - WSJ
CPI(YoY): 2.3% in April. A four year low. Core CPI: 2.8%, matched forecasts. Markets remained silent, which might indicate investors think it's too early to gauge the full impacts of Trump’s tariff policies.
The reporters stated that the front-loading of inventories would delay the impact of duties, citing quotes from Goldman Sachs.
China’s New Loans Plunged 61% as Trade War With US Intensified - Bloomberg
China's new loans in April declined sharply. Both household and corporate loans remain weak, which may imply that economic sentiment in China has deteriorated due to trade tensions with the U.S.
China’s Riskier Short-Term Corporate Bond Spreads Hit Record Low - Bloomberg
Risk premiums of Chinese corporate bonds reached lowest since 2022, suggesting that the recent monetary easing by the PBOC actually worked.
Comment: Although tensions between the U.S and China eased and several stimulus measures took place, I do not expect that China can recover dramatically since Chinese property market and inflation still remain weak.
US producer prices unexpectedly fall in April | Reuters
U.S. producer prices unexpectedly fell in April as the cost of services declined by the most since 2009.
US weekly jobless claims unchanged amid stable labor market | Reuters
US Homebuilder Sentiment Slides to Lowest Level Since 2023 - Bloomberg
US Factory Output Declines for the First Time in Six Months - Bloomberg
Still, overall industrial production was unchanged.
Japan’s Economy Shrinks in First Quarter Before Trump Tariff Jolt - Bloomberg
The decline in GDP was larger than a 0.3% contraction forecast by economists.
U.S. Loses Last Triple-A Credit Rating - WSJ
Moody’s Ratings downgraded the U.S. government on Friday, citing large fiscal deficits and rising interest costs. It was the last AAA credit for the U.S.
Comment: One of the most important news for this week. Maybe we have to rewrite all the books about finance and economy. Where do we go now..? Where should we rely on?
A gauge of sentiment among small firms, fell to 95.8 in April from 97.4 in March, keeping the index below the 98 mark that represents the long-term average for confidence among small companies.
Consumer Sentiment Darkens Further With Inflation Worries Rising - WSJ
Comment: In general, soft data like consumer sentiment are not very reliable, as people tend to assume that current conditions will persist, ignoring early signs of a turnaround as a result. However, this time may be different as the weakened sentiment could become self-fulfilling. The confidence of the Main Street deteriorated not because of a temporary dip, but due to a long-lasting threat: the Trump risk. By the way, I do not expect 'recessions'.
2. Central Bank
ECB’s Nagel Says US Tariff News Almost Caused Financial Meltdown - Bloomberg
Nagel said that markets were close to a 'meltdown' after the announcement of 'reciprocal tariffs'. Although markets recovered after successful negotiations, Nagel noted that the uncertainty is still ongoing.
BOJ upbeat on wages despite US tariffs, sees scope to resume rate hikes | Reuters
BOJ's deputy governor said that he expects wages and prices to climb despite the uncertainty of the U.S. tariff policy. He reiterated its stance of raising interest rates gradually.
Fed’s Jefferson Sees Lower Growth, Says Inflation Could Rise - Bloomberg
Despite the recent inflation data, Jefferson said that the goal on inflation has not yet been reached.
Fed's Goolsbee: Data still noisy as Fed waits to understand tariff impacts | Reuters
In short: even dovish members say 'Not Yet'
Fed’s Daly Says US Economy Still Solid, Officials Can Be Patient
Daly said that the Fed would 'wait and see' as the U.S. economy remains solid.
Fed’s Jerome Powell Steers New Strategy for a World Where Very Low Interest Rates Are No Sure
Thing - WSJ
The
Fed reviews its policy-setting framework every five years. Accordingly,
it has begun a new review. Chairman Powell announced that the Fed could
complete the review and unveil the results by August or September.
In
2020, Fed officials decided to keep interest rates somewhat lower than
model-based recommendations, allowing inflation to run above the 2%
target.
Nick Timiraos noted that changes to the Fed’s rate-setting framework are unlikely to influence current decisions. On the other hand, he pointed out that we should be aware that the ‘lower-for-longer’ interest rate era may be coming to an end.
Comment: This is the most important news for this week. Prepare for the new regime.
Fed's Barr Says Supply Chain Disruptions Could Boost Inflation - Bloomberg
ECB’s Guindos Warns Financial System Still Facing Trade Risk - Bloomberg
ECB to Propose Capital Neutral Regulation Changes by Year End - Bloomberg
The approach is to simplify Europe’s banking rulebook by the end of the year.
Comment: One of the most important news for this week
Fed’s Bostic Says He Sees One Rate Cut This Year, No Recession - Bloomberg
Bostic expects the US economy to slow this year but not fall into recession. “I have one cut for the year,” Bostic said.
3. Politics / World
Trump Seeks to Align US Drug Costs With Cheapest Ones Abroad - Bloomberg
Comment: Even worse than communists.
Hamas says it will release Israeli-American hostage Edan Alexander | Reuters
Hamas officials will release the last surviving American hostage without specifying for the release.
Kurdish PKK disbands and ends 40-year Turkey insurgency | Reuters
The Kurdistan Workers Party (PKK) militant group, which has been locked in bloody conflict with the Turkish state for more than four decades, decided to disband and end its armed struggle.
Brazil seeks China trade boost amid Trump tariff chaos as Lula meets Xi | Reuters
Brazil’s president visits China this week to tighten relations between the two nations amid tradet ensions.
Japan PM Ishiba reiterates call to eliminate all tariffs with US | Reuters
Ishiba reiterated on Sunday that he will aim for the elimination of all tariffs in trade negotiations with the United States.
Surprise U.S.-China Trade Deal Gives Global Economy a Big Reprieve - WSJ
Chinese
imports into the U.S. will face a 30% tariff overall(10% + fentanyl
20%) and U.S. goods imported in China will face a 10% tariff. Bessent
said that neither side wants to decouple.
Zelenskiy says he will meet Putin after Trump tells him not to await truce | Reuters
Putin proposed direct negotiations on a ceasefire without any preconditions and Zelensky agreed to meet him this Thursday.
Indian army says talks with Pakistan's military operations chief delayed | Reuters
US Says Trump Visit Secured $600 Billion in Investments From Saudi Arabia - Bloomberg
President Donald Trump said Saudi Arabia would commit to investing $1 trillion in the US.
Israel’s Netanyahu Vows to ‘Finish the Job’ of Destroying Hamas - Bloomberg
Netanyahu reiterates his ultimate goal is to eliminate Hamas from Gaza entirely.
India Trade Minister to Visit US This Week to Discuss Tariffs
India’s Trade Minister visits the U.S. this week to discuss tariffs, according to people familiar with the matter.
China Removes Ban on Boeing Deliveries After US Trade Truce - Bloomberg
Officials in Beijing have started to tell domestic carriers and government agencies this week that deliveries of US-made aircraft can resume, according to people familiar with the matter.
Ukraine's Zelenskiy insists on face-to-face talks with Putin in Istanbul | Reuters
Zelenskiy said that he would start direct ceasfire negotiations only if Putin is also there for talk. Kremlin did not answer back whether the president would attend.
US slashes 'de minimis' tariff on small China parcels to 54% | Reuters
Trump cuts duties on China low-value commercial shipments to 30%-experts
Germany's Merz: EU to tighten sanctions on Russia if no progress on Ukraine this week | Reuters
Merz said that EU leaders agreed to impose tougher sanctions on Russia if no progress on ceasefire talks.
China says fentanyl issue is responsibility of the United States | Reuters
China has repeatedly said the fentanyl crisis is a U.S. issue.
US to Boost Saudi AI Chip Access Even as China Issues Linger - Bloomberg
Bloomberg reports that the White House might allow Saudi to access more chips.
US, Qatar deals to generate $1.2 trillion in 'economic exchange', White House says | Reuters
Israel's Netanyahu accuses Macron of standing with Hamas | Reuters
???
Putin, Trump to skip Ukraine's peace talks that Russian leader proposed | Reuters
Trump and Putin didn't attend the peace talks on Russia-Ukraine war in person.
Trump says US close to a nuclear deal with Iran | Reuters
Trump said there had been significant progress on a nuclear deal with Iran. However, several Iranian officials told Reuters that considerable gaps still remain between the two countries.
Trump: India has offered US a trade deal with no tariffs | Reuters
Trump said on Thursday that India had offered a trade deal that proposed "no tariffs" for American goods, while expressing his dissatisfaction with Apple's plans to invest in India.
Pakistan Says Ceasefire With India to Be Extended to May 18 as Truce Holds
US considers more Chinese companies for 'entity list,' source says | Reuters
The U.S. is considering placing more Chinese companies, including ChangXin Memory, SMIC, Yangtze Memory Tech. on its restricted export list, a person familiar with the matter said.
Trump says we need to help starving Palestinians in Gaza | Reuters
Comment: So True. we MUST help them.
China-US 90-day tariff truce should be extended, Global Times says | Reuters
Stop-gap deals do not mean Donald Trump’s trade war is over
Comment: True. The tariffs and barriers toward each other are still high. Well, just wait and see. And, as John Bogle would say, stay the course.
Why India is annoyed by its ceasefire with Pakistan
Indian officials are clearly irked by comments from Mr Trump. By allowing America to intervene, India sacrificed the “strategic autonomy”, Indian officials complained.
Violent crime is falling rapidly across America
The article from The Economist points out that giving therapy and job training to young men who co-operate has been a critical breakthrough in reducing violence across America.
4. Business / Market
Aramco’s Earnings Narrowly Beat Expectations - WSJ
Although the average price for crude oil fell to $76.3 a barrel from $83.0 a barrel, Aramco's earnings narrowly beat expectations.
China's CATL to raise at least $4 billion in Hong Kong listing | ReutersBloomberg reports that Apple aims to manufacture specialized chips for AI servers and smart glasses by 2027.
Coinbase quarterly profit falls as expenses climb, shares down | Reuters
How to Think About the Stock Market When Earnings Guidance Becomes Meaningless - WSJ
The reporter points out that U.S. stocks seem too expensive based on backward-looking valuations and the trendline of P/E ratio.
Eli Lilly’s Zepbound Trims More Belly Fat Than Novo’s Wegovy in Study - Bloomberg
Zepbound helped people trim about two inches more off their waists than Novo Nordisk A/S’s Wegovy.
Swiss Outlook Cut at UBS With Warning on Trump’s Pharma Push - Bloomberg
Economosits at UBS expect Switzerland's GDP to grow by 1% in 2025, lower than a prior outlook of 1.5% due to Trump's pressure on trade and drugmakers.
Chinese Stocks Slide as Trade Truce Seen Dashing Stimulus Hopes - Bloomberg
Chinese stocks reversed initial gains from eased tariff tensions as investors kept eye on still-higher tariffs and concerns that the Chinese government might hold back stimulus after the truce.
Xiaomi Shares Drop as Consumers Complain About Marketing of EVs - Bloomberg
Samsung Debuts $1,099 S25 Edge, Kicking Off Wave of Thin Phones
Chinese Weapons Gain Credibility After Pakistan-India Conflict - Bloomberg
The reported success of Chinese J-10Cs might bolster Beijing's arms exports.
AI Startup Perplexity’s Valuation Surges to $14 Billion in New Funding Round - WSJ
Perplexity is in advanced talks for a new funding round that would value it at $14 billion, a more than 50% increase from late last year, according to people familiar with the matter.
Iron Ore Bounces Back to Six-Week High on US Trade Truce Hopes - Bloomberg
Dollar Drops as Korea Talks Fuel Bets Trump Wants Weaker Currency
The US currency declined after a report that South Korea and US officials discussed exchange rate policies.
Microsoft to lay off around 3% of workforce in organization-wide cuts | Reuters
So-called 'Big-tech' companies invest heavily on AI while reducing costs by laying off staffs to maintain their profitability. Although profits among AI companies remain robust, investors are concerned about the costs of scaling.
Intel has limited customer commitments for latest chip manufacturing tech, CFO says | Reuters
AMD announces new $6 billion share buyback plan | Reuters
Nvidia supplier Foxconn cuts outlook due to currency appreciation | Reuters
Foxconn lowered its outlook due to the recent appreciation of the Taiwan dollar. Also it showed concerns over uncertainty of U.S tariff policies.
China says to accelerate financial support for sci-tech innovation | Reuters
Comment: No specific approaches announced. I do not count on their political rhetoric.
Exclusive | 401(k) Giant to Allow Private Markets Investments in Its Retirement Portfolios
The 401(k) giant Empower will start allowing private credit, equity and real estate in some of the accounts it administers later this year.
UnitedHealth (UNH) Said to Be Under Investigation for Medicare Fraud - Bloomberg
WSJ reported that UnitedHealth is under criminal investigation for Medical fraud.
Microsoft Layoffs Hit Coders Hardest With AI Costs on the Rise
According to the sources reviewed by Bloomberg, Microsoft's layoffs mainly target software engineers.
Comment: Recently, I mentioned that 30% of recent projects of Microsoft are written by AI. For now, professionals including software engineers should focus on "what to do" with AI tools, not "how to build" AI models. This does not imply that students should 'not study' AI. Rather, I would say it is more imporatant to understand AI algorithms to use AI tools in an efficent way.
Coinbase (COIN) Looks to Make More Acquisitions After Deribit Purchase - Bloomberg
US close to letting UAE import millions of Nvidia's AI chips, sources say | Reuters
The U.S. has a preliminary agreement with UAE to allow it to import 500,000 of Nvidia's most advanced AI chips per year, according to two people familiar with the matter.
Alibaba missed its revenue estimates as competition in the e-commerce market intensified and Chinese consumer sentiment deteriorated amid escalating trade tensions.
Walmart warns of higher prices as Trump tariffs start to bite | Reuters
Walmart explictily stated that it would start raising prices later this month due to the high costs from tariffs. Although the levies on Chinese imports were reduced to 30%, Walmart's executives said that it's still high to bear.
Comment: It's fun to see Walmart CEO's sugarcoating on the trade truce. Otherwise, Walmart will also be labeled as 'a communist party' LMAO.
Coinbase Global Says Customer Data Stolen, Held for Ransom - WSJ
Crypto has become the ultimate swamp asset
Coinbase said an unknown party has stolen customer data and is demanding money in exchange, but it hasn't paid.
This might have a short-term negative impact on crypto prices. While I agree with The Economist’s point, I’d add: “Who really cares?” Nobody seriously considers cryptocurrencies to be safe havens—neither as 'digital gold' nor as a guarantee of user privacy. People signed up for extremely risky assets with no safeguards or regulations. Supply just followed demand. That’s all.
Nvidia to Set Up Research Center in Shanghai, Maintaining Foothold in China - WSJ
Comment:
I agree with Hwang that the U.S should make China rely on tools and
environments of the U.S. The hegemony comes from exporting global
standards, not threatening other countries by power.
Novo Nordisk ousts CEO after falling behind in weight loss market | Reuters
Comment: I do not think that kicking off CEO was necessary for a breakthrough. It only reflects panic among the company, which only make investors doubt the company's future.
OpenAI to help UAE develop one of world's biggest data centers, Bloomberg News reports | Reuters
OpenAI Takes on Google, Anthropic With New AI Agent for Coders - Bloomberg
OpenAI is introducing a new AI agent called Codex, designed to help with software development.
Comment: Have mercy upon coders like me...
Nvidia’s original customers are feeling unloved and grumpy
In February, Nvidia reported that quarterly revenue at its gaming division was down 11%(YoY) due to the high prices and failures in QC.
Comment: In my case, I did not buy new GPUs for 6 years not because I was disappointed with the new lineups. Rather, I didn't need to buy them as my PC is still runs the games I enjoy. Maybe the decline in Nvidia’s gaming revenue has more to do with customers like me than with pricing or quality control alone.
Young Chinese are turning to AI chatbots for friendship and love
5. Indices & Commodities
Relief on trade tensions prompted investors to shift toward riskier assets rather than treasuries. Treasuries plunged even further after Powell's comment that convinced maket participants not to expect earlier rate cuts. Weak sentiment among consumers and lower-than-expected inflation data renewed bets on earlier rate cuts. At last, Treasuries and DXY plummeted after U.S. Loses Last Triple-A Credit Rating - WSJ

Coinbase (COIN) Looks to Make More Acquisitions After Deribit Purchase - Bloomberg
Coinbase quarterly profit falls as expenses climb, shares down | Reuters
Coinbase Global Says Customer Data Stolen, Held for Ransom - WSJ
→Relief on trade tensions prompted investors to shift toward riskier assets including BTC and equities. Weak sentiment data from consumers & small business and concerns over high valuations on stocks slowed the rally.
→BTC underperformed compared to the NASDAQ, as it had not fallen much during the bear market and was weighed down by several negative news events.
Coinbase (COIN) Looks to Make More Acquisitions After Deribit Purchase - Bloomberg
Coinbase quarterly profit falls as expenses climb, shares down | Reuters
Coinbase Global Says Customer Data Stolen, Held for Ransom - WSJ
→Relief on trade tensions prompted investors to shift toward riskier assets including BTC and equities. Weak sentiment data from consumers & small business and concerns over high valuations on stocks slowed the rally.
→BTC underperformed compared to the NASDAQ, as it had not fallen much during the bear market and was weighed down by several negative news events.
Gold failed to rally even despite inflation concerns as investors preferred riskier assets over safe havens after the trade truce between U.S. and China.
Oil Prices Rise 3% on U.S.-China Deal But Downside Risks Remain - WSJ
Brent climbs 3.8% to $66.35 a barrel, while WTI jumps 4.1% to $63.50 a barrel after eased concerns over a trade war.
U.S. Crude Oil Supplies Rise Unexpectedly - WSJ
Oil Prices Fall on Weaker Demand, Possible U.S.-Iran Deal - WSJ
Oil prices plunged as unexpected increase of U.S crude inventories, along with concerns over U.S. Iran deal and weaker demand.
Hedge Funds Boost Bullish Bets on Brent on US-China Trade Truce - Bloomberg
→Despite oversupply concerns, easing trade tensions were enough to support weekly gains in oil prices.
6. Opinion
I left my comments and opinions on several articles. I will end up with restating them.
- China's new loans in April declined sharply. Both household and corporate loans remain weak, which may imply that economic sentiment in China has deteriorated.
- China did not announce specific approaches or implement strong stimulus despite the weakened economy. I am sick of their political rhetorics. That's the reason why I sold part of my Chinese stocks.
- We should be aware that the ‘lower-for-longer’ interest rate era may be coming to an end. → No 'blind rally' anymore. I would reconsider my framework on investing decision.
- The tariffs and barriers against each other still remain high compared to good-old days. Well, just wait and see. And, as John Bogle would say, stay the course.
- Bank deregulation would be the most critical factor to fuel a market rally if it comes true. Keep an eye on regulators.
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