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- 🟢 May’s Market Boom Meets a Double Dose of Uncertainty
🟢 May’s Market Boom Meets a Double Dose of Uncertainty
As stocks surge, a bond market warning from Jamie Dimon and Trump’s abrupt 50% steel tariff set the stage for summer volatility.

In Today’s Newsletter
*Today’s deep dive might be the most important article you will read all year! Don’t miss it and be sure to share it with others. It’s that important IMO.
Here’s what else we will cover…
U.S. markets closed the month on a high note. The S&P 500 rose 6.2%, the Nasdaq surged 9.6%, and the Dow Jones added 3.9% in May, marking the strongest monthly gains since late 2023.
JPMorgan CEO Jamie Dimon has raised alarms about a looming crisis in the U.S. bond market, citing the country’s deteriorating fiscal health. The 10-year Treasury yield ended the week at approximately 4.40%.
And President Trump announced a surprise decision to double tariffs on imported steel from 25% to 50%, effective next week, aiming to strengthen the U.S. steel industry. This move has raised concerns about potential economic instability and its impact on international trade agreements.
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Markets Year-To-Date
Index | Level | Change | Pct (%) Change |
---|---|---|---|
DJIA | 42,270.07 | -274.15 | -0.64% |
S&P 500 | 5,911.69 | +30.06 | +0.51% |
NASDAQ | 19,113.77 | -197.02 | -1.02% |
Here’s What I’m Reading
JPMorgan CEO Jamie Dimon warned of potential instability in the U.S. bond market, citing the nation's growing fiscal deficit and recent tax cut proposals. The 10-year Treasury yield ended the week at approximately 4.40%. WSJ
President Trump announced a doubling of tariffs on imported steel to 50%, effective next week, aiming to bolster the U.S. steel industry. This move has raised concerns about potential economic instability and its impact on international trade agreements. The Guardian
LNG Shipping Regulation Exemption: U.S. energy companies urged the Trump administration to exempt LNG tankers from a new rule requiring exports on U.S.-built ships, citing insufficient American-made vessels and potential penalties like loss of export licenses. Reuters
Royal Caribbean Cruises Ltd. (RCL): is significantly affected by regulatory changes as evidenced by Mexico's cruise tax reduction from $42 to $5 per passenger, which directly impacts their operations and future profitability. The Street
Chevron (CVX) Hess Acquisition: Chevron's $53 billion acquisition of Hess is facing arbitration hurdles due to Exxon's claim of a right of first refusal on Hess's stake in Guyana's Stabroek Block, with a confidential hearing set in London under the International Chamber of Commerce. The Middle Market
Deep Dive
The Quiet Boom: Why Asset Prices Are Rising While Everyone Fears a Storm
After two decades in the markets, I’ve learned to pay more attention to what people aren’t talking about. Lately, the headlines scream about tariffs, slowing jobs data, and election-year chaos. But dig beneath the noise, and there’s something unusual happening in the U.S. economy—a silent, powerful undercurrent that smart investors should be watching.
It’s raining money.
Not from the Fed, but from fiscal policy. Washington quietly shoved over $200 billion into consumers’ pockets this spring, most of it landing with retirees via Social Security back payments. This isn’t speculation or stimulus talk. It already happened. And it’s already moving markets.
Surprise! There’s More Money in the System
Michael Drury, one of the most reliable voices on macro data I follow, recently flagged something that flew under most economists’ radar: the Social Security Fairness Act. This little-noticed legislation boosted monthly checks for 3.2 million people by $360, retroactive to January 2024. Do the math, and that’s $220 billion in extra buying power. One-time, yes. But still, it’s like a fiscal thunderstorm that hit while everyone was still checking the weather app.
Layer on top of that the continued strength in compensation (up around 6% annually) and medical transfers (growing at nearly 12%), and you start to see the real driver of this economy: income.
Now here’s where it gets interesting for investors: when people have more money, they tend to spend some and save the rest. But initially, that saved money flows into asset markets. Stocks, real estate, even alternative stores of value like gold or Bitcoin. That’s what happened during COVID, and it’s happening again.
If you’re investing for income and long-term growth, this setup matters more than the daily macro mood swings.
Inflation: Not Dead, Just Evolving
The market wants to believe inflation is behind us. But Drury argues—convincingly—that we’re setting a new baseline: think 3-4%, not 2%. That’s before factoring in the next wave of tariffs that could add another percentage point.
If this sounds like the 1970s, you’re not wrong. Back then, inflation started with good intentions (more social programs, more military spending) but without budget discipline. The same dynamics are taking shape again: an aging population, global tensions, and politicians allergic to saying “no.”
Here’s what I think many are missing: inflation doesn’t need to skyrocket to hurt. Persistent 3-4% inflation eats away at purchasing power, especially for retirees and fixed-income investors. But it also lifts nominal growth and corporate profits in the near term. That’s the paradox.
So What Now? Three Big Takeaways
Dividends Are Still King, But Look for Pricing Power
If inflation is here to stay (or drift higher), then the best dividend growers will be those with pricing power. Think sectors like healthcare, energy infrastructure, and tech platforms with recurring revenue. Don’t just chase yield—chase durability.Asset Inflation > Consumer Inflation (For Now)
Money is piling into financial markets before it reaches Main Street. This creates opportunity. Equities are rebounding, real estate hasn’t cracked under 7% mortgages, and alternative assets are finding new footing. The rising tide hasn’t lifted all boats yet, but the current is strong.Watch the Job Market for the Next Turn
Employment data is softening. Claims are creeping up. Businesses are cautious. If job growth weakens and wages slow further, the consumer may pull back. That’s when the inflation versus growth tug of war gets messy, and when the market could stumble. Next week’s jobs report will be telling.
Final Thought
I’ve seen plenty of cycles. This one is different (famous last words, right), not because of the data, but because of how it’s being misread. Too many are looking for a traditional recession or a Fed pivot. But the real story may be that we’ve entered a phase of structurally higher income, structurally higher inflation, and strong nominal growth that benefits asset holders first.
That’s not a disaster. For prepared investors, it’s an opportunity.
Stay alert. Stay flexible. And don’t fall asleep on this quiet boom.
As always, these are my opinions shared for educational purposes and never serve as a recommendation to buy or sell any security. This article should not be seen as financial advice. Investing involves risk, and you need to do your own research before making any financial decisions.
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Disclosure: This content is for informational purposes only and is not a solicitation to buy or sell any security. Your situation is unique, and you must do your own research.
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