This past week was a huge in the world of finance and economics markets. Let's take a look into
it:
Trade and Markets in Focus
The week kicked off with renewed US-China trade talks, though no major agreements were reached
at first. Investors remained cautious as Apple’s stock dipped following its underwhelming
developer conference on Monday, while a new "baby bonds" proposal gained attention: a plan to
establish an account and invest $1,000 in index funds for every newborn to combat wealth
inequality. Following the initial investment, parents of the newborn can deposit up to $5,000
yearly.
Bitcoin Holds Strong, AI Investments Heat Up
On Tuesday, Bitcoin continued its impressive run, staying above $100,000 for 30 consecutive
days, a sign of strong market confidence. Meanwhile, Meta made headlines with a massive $14.9
billion investment in AI startup Scale AI, doubling down on the tech sector’s AI arms race.
However, not all news was positive: the World Bank downgraded US growth projections from 2.4% to
1.4%, citing ongoing trade war risks.
Inflation Cools, US-China Tariff Deal Takes Shape
Wednesday brought some relief as the latest CPI report showed inflation rising less than
expected, with the annual rate dropping to 2.4%—the lowest since early 2021. In a significant
(though still unsigned) trade development, the US and China agreed on new tariffs: a 55% rate on
select Chinese goods (30% blanket fee and 25% additional for specific products) and a 10% levy
on US imports. Additionally China will speed up mineral export licenses for rare earth metals in
exchange for Chinese exchange students being permitted to attend US colleges. Elon Musk also
made waves, issuing a rare apology for recent controversial remarks on X, however tensions with
critics remain high.
Boeing Crash, Tesla’s Robotaxi, and Private Equity Shifts
Thursday saw turbulence in the aviation sector after an Air India Boeing crash sent the plane
maker’s stock down 7%. On the tech side, Tesla announced a June 22 launch date for its
long-awaited Robotaxi ( self-driving Tesla Model-Y). In the Private Equity Sector, Ken Moelis
stepped down as CEO of Moelis & Co., while the NCAA’s new rules allowing direct athlete pay
opened doors for private equity to invest in college sports infrastructure.
Markets React to Geopolitical Tensions
Stocks took a hit Friday as Israel’s airstrikes on Iran rattled markets, sending oil prices and
gold soaring before oil stabilized. Travel and airline stocks were particularly affected.
Meanwhile, Amazon and Walmart explored the use of stablecoins, cryptocurrencies tied to a legal
tender such as USD, to reduce payment processing costs from credit card companies & banks as
well as reducing volatility. This caused stocks for credit card companies such as Mastercard and
Visa to take a fall.
Thanks for reading and be on the lookout for a piping new edition next Sunday!