Market Expectations & Trade Relations - Market expectations regarding US-China trade talks are realistic, with no anticipation of a grand deal [1][2] - A minor agreement on rare earth exports in exchange for tech exports may disappoint the market [2] - US effective tariff rate on all trade partners reached over 7% in April, a multiple of the rate in the past 25 years [3] - Tariff rate on China was up in the high 30% in April, subsequently decreasing but remaining at extreme levels [3] - Without a positive surprise in trade talks, the market may drift lower as profit-taking begins [4] Equity Market Performance - No fresh record highs are expected for US or global stocks [5] - US stocks have underperformed global stocks by approximately 7 trillion over the past four months [5] - US stocks experienced a sharp decline from early February to mid-March, subsequently keeping pace with global stocks [6] - A new positive catalyst is needed for US stocks to reach fresh record highs [7] Currency Market Outlook - The possibility of Euro/Dollar reaching 140 is being discussed [7] - The US dollar is expected to structurally decline significantly in the coming years, though not in a straight line [9] - An overshoot to 140 on Euro/Dollar is feasible but not expected this year [9]

Market Trends & Investment Strategies - Portfolio managers should consider selling the dollar due to an anticipated multiyear downtrend, similar to the post-Bretton Woods era in the 1970s [1] - Short rate strategies, particularly curve steepening, are advisable as long-end interest rates are expected to rise globally [2] - Defense stocks are recommended on the equity side, with further potential gains expected [2] Currency Dynamics - The dollar could potentially depreciate to 115 or even 140 within one to two years from its current level of 114 [3] - The speed of the potential dollar decline could mirror the 2002-2004 period, or even be more significant, reminiscent of the early 1970s [4] - Interest rate increases may reflect a risk premium concerning the dollar, behaving more like an emerging market dynamic [7] US Economy & International Order - Traditional cyclical dynamics in the US economy are becoming less relevant due to structural changes and international factors [6] - Tariffs and shifts in the international order need to be factored into US economic forecasts [6] - The Federal Reserve must understand how the changing international order will impact interest rates [6] - A weaker dollar is generally unfavorable, and no one would welcome a dollar at 140 [7][8]