Market Overview - In 2025, markets are experiencing high volatility, with NASDAQ and S&P 500 indices reaching all-time highs despite uncertain economic indicators [1][2] - Analysts anticipate clearer monetary and tariff policies in the second half of the year, along with solid earnings reports, particularly in the tech sector driven by AI [2] Company Insights - **CME Group**: - Operates the largest derivatives marketplace, benefiting from increased trading volumes in volatile markets [5] - Stock has risen over 40% in the last 12 months and over 18% in 2025, showing signs of recovery after a pullback [6][7] - **Goldman Sachs**: - A leading global investment bank that thrives in volatile markets, generating revenue from expanded bid-ask spreads and increased trading activity [9][10] - Stock is up 23.8% in 2025, with bullish momentum but potential for a short-term pullback [11] - **MarketAxess**: - Operates an electronic trading platform for corporate bonds, expected to benefit from increased trading volumes as credit market volatility rises [13][14] - Stock is down 1.5% in 2025 but has shown a 3.1% increase in the last three months, indicating a potential breakout [15][16]

Inflation & Monetary Policy - Central banks have done a good job taming the great inflation of 2022 [1] - The primary concern should be the inflation trajectory, as it dictates the direction of interest rates [3][4] - Current policy is broadly in line with a neutral stance, with analysts suggesting a 7% nominal rate indicates neutral territory [14][15] - Uncertainty about the inflation trajectory persists due to past volatility [15] Inflation Target & Policy Revision - There's an opportunity for "opportunistic disinflation," using a low inflation environment to anchor inflation expectations [5][11] - The current inflation target range is considered too wide and high compared to peers, necessitating a revision [10] - The South African Reserve Bank is undergoing a review, with recommendations to lower the inflation target to 2-3% [6][8] - Lowering the inflation target could lead to lower nominal interest rates [14] Risks & Communication - Geopolitical shocks and policy decisions (tariffs) can impact the economic outlook [2] - Scenarios are useful for policymakers to communicate potential risks and future trajectories, but require careful communication to avoid public misinterpretation [16][17]

Investment Rating - The report has shifted its forecast for the next 25 basis point (bp) rate cut to September, previously expected in December, and has lowered the terminal funds rate forecast to 3-3.25% from 3.5-3.75% [2][3][22] Core Insights - The report indicates that the odds of a rate cut in September are somewhat above 50%, driven by underwhelming tariff effects, larger disinflationary offsets, and potential labor market softness [2][13][10] - The expectation is for three consecutive 25bp cuts in September, October, and December 2025, with additional cuts anticipated in March and June 2026 [3][22] - The report highlights that recent evidence suggests tariff effects on consumer prices are smaller than previously expected, contributing to a more favorable environment for rate cuts [5][4][10] Summary by Sections Rate Cut Forecast - The forecast for the next rate cut has been moved forward to September, with expectations of three 25bp cuts in September, October, and December 2025 [2][3][22] - The terminal rate forecast has been reduced to 3-3.25%, reflecting a change in outlook regarding the economy's performance at higher interest rates [14][18][22] Inflation and Tariff Effects - Recent comments from Fed officials indicate potential support for a cut in September if inflation data is not excessively high [4][6] - Evidence shows that tariff impacts on consumer prices are less significant than anticipated, with moderating wage growth and weak demand for travel providing additional disinflationary pressure [5][10][11] Labor Market Dynamics - The labor market remains healthy, but job openings are slowly declining, making it harder for unemployed individuals to find jobs, which could influence the timing of rate cuts [10][11][12] - Near-term risks to payrolls are noted due to changes in immigration policy and residual seasonality, which could prompt earlier cuts if employment data shows weakness [10][13]

Core Viewpoint - TMC The Metals Company has experienced a significant increase in stock price, driven by positive market momentum and favorable analyst coverage, despite some sell-offs in the latter half of the trading week [1][2][4]. Group 1: Stock Performance - TMC's stock closed the week up 3.8%, outperforming the S&P 500 index, which rallied by 3.4% [1]. - The stock has risen 44% over the last month, largely due to bullish market sentiment and a major investment from Korea Zinc [2]. - Following Wedbush's upgrade of TMC's rating from neutral to outperform, the stock saw a significant increase in trading activity [5]. Group 2: Market Dynamics - Positive macroeconomic indicators, including potential interest rate cuts by the Federal Reserve, have contributed to a bullish market outlook [4]. - A ceasefire between Israel and Iran has also provided a favorable geopolitical backdrop, enhancing investor sentiment [4]. Group 3: Analyst Coverage - Wedbush raised its one-year price target for TMC from $6 to $11 per share, indicating a potential upside of approximately 61.5% [5]. - The positive analyst coverage has played a crucial role in boosting TMC's stock performance [5]. Group 4: Regulatory Environment - The U.S. is increasing its domestic mineral production capabilities amid geopolitical tensions with China, which may benefit TMC [6]. - TMC still faces regulatory hurdles but the overall conditions appear to be improving for the company [6].

Market Overview - The market has recovered most of its losses from earlier in the quarter, finishing strong despite initial turbulence caused by President Trump's trade policies [1][2] - The upcoming week is expected to be shortened, following a quarter that started poorly but ended on a high note, emphasizing the importance of maintaining a steady investment approach [2] Company Insights - Constellation Brands is expected to report disappointing earnings, reflecting broader challenges in the consumer packaged goods sector [4] - The company faces headwinds from the rise of GLP-1 weight loss drugs and increasing consumer preference for cannabis, which are negatively impacting alcohol sales [4] - Constellation Brands' sales are particularly affected by Trump's immigration policies, as approximately half of its beer sales come from Hispanic consumers who are now spending less due to concerns over employment [4] Economic Indicators - The Chicago Purchasing Managers' Index will be released, serving as a key indicator of the industrial economy's health, with potential implications for Federal Reserve interest rate decisions [3] - Mortgage application figures are anticipated, which have been described as a significant burden on the economy [5] - The labor report set to be released on Thursday is critical; weak data could lead to renewed criticism of Fed Chair Jerome Powell and raise the possibility of a rate cut in July [5]

Company Performance - Nike reported fiscal Q4 earnings of $0.14 per share, exceeding expectations by $0.02, marking the eighth consecutive quarter of beating estimates [5] - Revenues for Nike in Q4 were $11.1 billion, although this represents a decline from $12.61 billion in the same quarter last year [5] - Full-year revenues for Nike totaled $46.3 billion, which was above the Zacks consensus but still down 10% year over year [6] - North America revenues for Nike decreased by 11% year over year, a trend that was consistent across all global regions [6] - Despite a strong trading day with a gain of 2.8%, Nike shares fell by 1.6% following the earnings announcement [6] Market Overview - The stock market is showing resilience, with all markets except the small-cap Russell 2000 up for the year, and the S&P 500 nearing all-time highs [2] - The AI sector is experiencing a resurgence, with companies like NVIDIA and Palantir reaching new record highs [2] - The White House indicated that the July 9th deadline on reciprocal tariffs is "not critical," which has alleviated concerns among investors [3] - Continuing Jobless Claims have worsened, suggesting a weakening labor market, which may prompt the Federal Reserve to consider cutting interest rates [4] Economic Indicators - Upcoming Personal Consumption Expenditures (PCE) data is anticipated, with year-over-year projections of 2.3% growth and 2.6% on core PCE, close to the Fed's inflation target of 2.0% [7]

Core Insights - AST SpaceMobile's stock experienced significant gains, closing up 9.3% amid a strong trading session for space stocks, while the S&P 500 and Nasdaq Composite both rose by 1% [1] - The company's valuation increased due to excitement in the space industry, geopolitical developments, and favorable comments from a Federal Reserve official, despite a downgrade from Scotiabank [2][4] - AST stock has surged 398% over the past year, reflecting strong investor interest despite recent caution from analysts [4] Market Dynamics - Scotiabank downgraded AST's rating from outperform to sector perform, citing concerns over valuation while acknowledging the company's technology and growth potential [4] - The stock initially opened lower, down 6.4%, but rebounded due to emerging catalysts, including military actions between the U.S. and Iran, which highlighted defense industry opportunities [5] - Federal Reserve comments regarding potential interest rate cuts have created a bullish sentiment for AST and other growth-dependent space stocks [6][7]

Core Insights - The Australian housing market is experiencing a significant recovery, with median house prices in major cities expected to rise sharply in the 2026 financial year, particularly in Sydney and Melbourne [1][2][7]. Group 1: Sydney Market - Sydney's median house price is projected to exceed AUD 1.8 million in the next financial year, with a growth rate of 7% anticipated [2][5]. - The market is highly sensitive to interest rate changes, which could further drive up prices [3][5]. - Current clearance rates in Sydney are around 70%, indicating strong demand and potential for price increases [5]. Group 2: Melbourne Market - Melbourne's median house price is expected to reach AUD 1.112 million, with a growth rate of 6% forecasted for FY26 [2][7]. - The market is entering a recovery phase after a period of underperformance, with increased buyer interest noted [7][9]. - Factors such as interest rate cuts and generational wealth transfer are expected to boost buyer capacity and market activity [9]. Group 3: Other Capital Cities - Brisbane's median house price is projected to approach AUD 1.1 million, with a stable growth rate of 5% [2]. - Perth is also expected to see its median price reach nearly AUD 1 million, with a growth rate of 5% [2]. - Adelaide's market is forecasted to grow at a slower pace of 4%, with a median price of approximately AUD 1.049 million [2].

Market Overview - The broader market has experienced a strong rally, with the S&P 500 delivering a total return of 10.5% over the last 12 months, driven by indications of moderating inflation and hopes for lower interest rates [1] Financial Sector Outlook - The outlook for financial companies is heavily influenced by macroeconomic conditions and the Federal Reserve's interest rate policy [2] PayPal Analysis - PayPal's stock is down approximately 17% year to date and 77% from its all-time high in 2021, despite solid gains in the broader financial sector [4] - The company maintains a strong position in the payments and financial services industry, with few competitors matching its financial foundations and operational track record [5] - PayPal's total revenue increased by 1% year over year to $7.8 billion, while total payment volume rose by 3% annually to $417.2 billion [6] - Non-GAAP earnings per share increased by 23% year over year to $1.33, with the company holding $15.8 billion in cash against $12.6 billion in debt after returning $1.5 billion to shareholders through stock buybacks [7] - PayPal stock is currently trading at 13.5 times this year's expected earnings, with potential for a more favorable operating environment if the Fed cuts interest rates [8] - The stock is viewed as an attractive investment opportunity in the financial sector due to its solid business foundations and encouraging performance [9] Prudential Financial Analysis - Prudential Financial is positioned to benefit from a potential increase in long-term interest rates, which could lead to higher yields on future bond purchases [13] - The stock is currently down 19% from its lifetime high, and higher interest rates may lower the value of its current bonds but increase the discount rate on its liabilities [13] - Prudential Financial offers a 5.1% dividend yield, making it a useful addition for portfolio insurance [14]

Group 1: Auction Market Performance - The auction clearance rates in major Australian cities are showing strong performance, with Sydney at 69% and Melbourne at 70% [1][12][14] - The auction market has reached its highest clearance rate since mid-2024, indicating a potential upward trend in property prices [12][13] - The number of properties auctioned has significantly increased compared to last year, particularly in Melbourne, which may attract more sellers [14][15] Group 2: Housing Market Trends - The housing price index for Australia's five major capital cities rose by 0.5% in May, reflecting steady growth across all major markets [3] - In the May quarter, housing prices increased by 1.2%, with Brisbane leading at 1.6%, followed by Perth (1.4%) and Adelaide (1.3%) [5] - Lower interest rates and rising consumer confidence are expected to sustain the momentum seen in the typically quieter winter months [10][18] Group 3: Economic Factors Influencing Housing - Anticipation of a 0.25% interest rate cut by the Reserve Bank of Australia has contributed to significant price increases in May [7][16] - Consumer confidence, which had declined in April, is now on the rise, encouraging larger purchases such as homes [9] - The government's 5% deposit scheme for first-time homebuyers, effective from January 1, 2026, is expected to further boost demand and property prices [18]