For the week 6/2-6/6

[Posted 4:30 PM ET, Friday]

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Edition 1,363

I get into the Elon Musk-Donald Trump rupture down below, in great detail, but just another sad chapter in the life of Trump World, and a black eye for America.  I don’t receive the hate mail as much as I used to, but I learned long ago, starting StocksandNews, that you never argue with a detractor.  Most of the times I simply ignored it, but I also learned to reply upon receiving a nasty note, “Thanks for writing.” That’s it.  The person stops corresponding, and I’m assuming stops reading StocksandNews.  Fine.  But it works.

Oh, if only Elon and President Trump had done the same.

Meanwhile, it staggers the mind that when it comes to Vladimir Putin, a man with a history of thuggery and murder, often on a massive scale, that Donald Trump can not get himself to say that when it comes to the war in Ukraine, launched by Vlad the Impaler, that it is the Battle between Good and Evil.  Not once.

And when it comes to Russia’s massive use of Iranian drones to kill an estimated 12,000 Ukrainian civilians over the course of the war, President Trump has not once publicly acknowledged this fact.

And now, when the U.S. Senate has the votes to issue the most “draconian sanctions” ever on a single nation, as Sen. Lindsey Graham (R-S.C.) has put it, Trump says he doesn’t want to use that tool yet because it would interfere with negotiations…negotiations that are nonexistent.

Speaking to reporters in the Oval Office Thursday, visiting German Chancellor Friedrich Merz taking it all in sitting next to the president, Trump said he told Putin not to retaliate for Ukraine’s spectacular, inspiring drone attack on four Russian airbases days earlier, and compared the war to squabbling children who have to just be left to fight.

“Sometimes you see two young children fighting like crazy.  They hate each other, and they’re fighting in a park, and you try and pull them apart. They don’t want to be pulled, sometimes you’re better off letting them fight for a while,” Trump said, adding that he’d related that analogy to Putin in the call they had Wednesday.

This is nuts…downright moronic.  Trump on Wednesday also thanked Putin for assistance in the thorny negotiations over Iran’s nuclear program.

“What happened was an obvious trade-off, Ukraine for Iran,” said Abbas Galyamov, political consultant and former Putin speechwriter.   “It looks like Putin phoned in with this proposal, essentially saying – don’t prevent me from dealing with Ukraine, and I will help you deal with Iran.”

Trump is “leaning toward” faulting President Zelensky for escalating the conflict, argued pro-Kremlin political analyst Sergei Markov.

“That is why he called Putin – to say that the U.S. is not responsible for Ukraine’s vile, treacherous strike on Russia’s nuclear potential,” Markov wrote in a Telegram post.  “And he agreed with Putin that Zelensky is escalating the conflict.”  [Washington Post]

Every few years, I feel compelled to reference a superb PBS’ “Frontline” documentary (2015), on the rise of Vladimir Putin, calling attention to a particular early chapter as Putin sought to replace Boris Yeltsin.  The 1999 Moscow Apartment Bombings.  Three hundred civilians died in the bombings, which Putin used as a pretext for a second war in Chechnya, and as a way to build up his image as the kind of tough leader Moscow needed at that moment.  But it was an FSB (successors to the KGB) operation.

I was writing this column then.  I blamed Putin for the bombings, long before anyone else, including the great William Safire at the New York Times, who famously came forward with the claim later.

Watch it…if you don’t want to view the whole 53 minutes, mention of the bombings begins around the 17:30 mark.  This is Vladimir Putin.  This is the man who since his pathetic performance standing next to him at the 2018 Helsinki summit, Donald Trump has refused to speak ill of.  It is sickening.

—

Trump World….

—Last Friday afternoon in Pittsburgh, after I had posted, President Trump suddenly announced he would double tariffs on imported steel to 50%. 

“This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers,” he stated in a Truth Social post after announcing the tariffs during a rally celebrating a “blockbuster” agreement for Japan-based Nippon Steel to invest in U.S. Steel.

Trump told steelworkers U.S. Steel would “stay an American company” after what he is now calling a “partnership” with Nippon.

But U.S. Steel’s website links to a stand-alone site with the combined branding of the two companies that features a statement describing the transaction as “U.S. Steel’s agreement to be acquired by NSC.”

Reminder, aside from the potential impact on canned foods like soup and tuna (let alone cars and trucks) – economists warn of a spillover effect that steel and aluminum tariffs can have on a gamut of items. If the cost to build a store or buy a truck to haul food rises, the prices of products will follow.

As economics professor Andreas Waldkirch of Colby College commented:

“Anybody who’s directly connected to the steel industry, they’re going to benefit.  It’s just coming at a very high cost,” Waldkirch says.  “You may get a few more steel jobs. But all these indirect costs mean you then destroy jobs elsewhere. If you were to add that all in, you come up with a pretty large negative loss.”

Britain breathed a sigh of relief on Wednesday, after it was granted a carve-out from Trump’s 50 percent tariffs on steel and aluminum, while the rest of Europe fumed.  But Britain still faces 25% tariffs because the ‘framework’ trade deal with the U.S. has yet to be put in place.

–And then over the weekend, the U.S. and China traded accusations over alleged breaches of their tariff truce.

China on Monday hit back against President Trump’s accusation from the prior week that Beijing has “totally violated its agreement” with the U.S., in turn accusing the U.S. of breaching the agreement and vowing to protect its interests.

“If the U.S. insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the Chinese Ministry of Commerce said.

The Chinese Commerce Ministry warned that the U.S. has “seriously undermined” what had been agreed to in the recent truce.  The ministry said China held up its end of the deal, canceling or suspending tariffs and non-tariff measures taken against the U.S. “reciprocal tariffs” following the agreement.

“The United States has unilaterally provoked new economic and trade frictions, exacerbating the uncertainty and instability of bilateral economic and trade relations,” while China has stood by its commitments, the Commerce Ministry statement said.

Beijing accused the U.S. of introducing the discriminatory restrictions, which include new guidelines on AI chip export controls, fresh curbs on Huawei Technologies Co. chips, the withdrawal of Chinese student visas, as well as barring the shipping of critical jet engine parts.

The escalation comes after the temporary trade agreement Treasury Secretary Bessent and others had negotiated with China in Geneva weeks ago.

Trump’s top lieutenants were out in force on Sunday, telling the news shows that trade talks between Trump and Chinese President Xi Jinping could happen this week, while others said the administration would press ahead on tariffs despite recent court rulings.

National Economic Council Director Kevin Hassett told ABC News that the administration was confident courts will uphold the tariffs, after a trade court briefly blocked them last week because it said the president was overstepping his authority.

That suggests the war of words is largely posturing in order to gain leverage.  But as I alluded to last week, what has President Trump and the administration upset with China is largely about their slow-walking on rare-earth minerals.  The U.S. claims Beijing had said in the talks that they would speed up exports, and that the decision to reduce tariffs hinged on a Chinese agreement to lift export controls on some rare earths.

“It’s going to require a discussion between the presidents of the two countries,” Deputy Treasury Secretary Michael Faulkender said Monday in an interview.

President Trump then said in a late-night (2:17 AM) post Tuesday night:

“I like President Xi of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!”

Chinese Foreign Ministry spokesman Lin Jian said at a regular press conference on Wednesday, when asked about Trump’s post on Xi: “China’s principle and position of developing China-US relations is consistent.”

You still have an Aug. 12 deadline for the trade truce with China to expire, and a breakdown remains a risk.

And you have the July 9 deadline for Trump’s reciprocal tariffs that he paused April 9.  Commerce Secretary Howard Lutnick told Fox News Sunday countries are still engaged in talks with the U.S., but that as of now the July 9 deadline isn’t going to be extended.  Trump will set tariff rates for countries that haven’t reached a trade deal by then.

The European Union faces a 50% tariff on imports from the bloc, and the EU said on Monday it “strongly” regrets Trump’s hike on steel and aluminum imports, saying it undermines planned trade talks.

Thursday morning, we then learned Presidents Trump and Xi had a phone call, initiated by Trump, and the two agreed to hold more trade talks in hopes of breaking an impasse over tariffs and global supplies of rare earth minerals that has begun to threaten the global economy.

Trump, on social media, described the conversation as “very positive.”  He said the two focused entirely on the trade relationship between the two nations, Trump implying that they had resolved issues surrounding mineral exports, which China had recently halted to the United States, though he did not provide details.  He said his trade team would meet again soon with Chinese officials*, in a yet-to-be-determined location.  And Trump said he and Xi had invited each other and their spouses to visit their respective countries.

*Trump announced this afternoon talks will be held Monday in London.

Chinese state media said Xi had called for greater cooperation, consultation and respect between the countries.  “The U.S. side should acknowledge the progress already made, and remove the negative measures taken against China,” said a readout on the call.

But was any progress really made?  Doubtful.  Uncertainty continues to hang over businesses. But we’ll see what happens Monday.

–In April, the administration vowed to sign trade deals with as many as 90 countries in 90 days.  Thus far, you have a framework for talking about a single deal, Britain, and that’s it.

A New York Times analysis of major agreements with the United States currently in effect showed they typically take 917 days, or roughly two and a half years, to go from initial talks to the president’s desk for signature.

—Jared Isaacman, President Trump’s pick to be NASA administrator, was told by the White House that his nomination would be rescinded last Friday.

Isaacman, a billionaire entrepreneur, had been approved by the Senate Commerce Committee and was preparing for a vote in the full Senate as early as this week.

“It is essential that the next leader of NASA is in complete alignment with President Trump’s America First agenda and a replacement will be announced directly by President Trump soon,” said White House spokesperson Liz Huston.

There were divisions among Republicans over the move.  Some in Congress had been concerned about his connections to SpaceX and Elon Musk.  Isaacman flew twice to space with SpaceX and had commissioned two more flights with the company.

But Isaacman had the backing of much of the space community and some of Isaacman’s allies, including Musk, had been trying to convince the White House to keep him.

The nomination had come at a time when the administration was proposing drastic cuts to NASA.  Last Friday, it released its budget request, which called for a 24 percent reduction.  It is the smallest request since 1961, adjusted for inflation, and could lead to a reduction in the civilian workforce surrounding NASA by over 11,000 employees.

Trump confirmed on Truth Social Saturday he was appointing a new nominee soon.

Isaacman actually seemed perfect for the position.

“It is rare to find someone so competent and good-hearted,” Musk said on X about his friend.

But here is the rub.  He made political donations to both Democrats and Republicans.  During an interview with the Wall Street Journal last November, Isaacman described himself as a political hypermoderate.

At a Senate Commerce Committee hearing in April, Isaacman sketched out a broad agenda for the agency, making the case that it could pursue ambitious exploration missions to both the moon and Mars.

He also said of SpaceX at the hearing, “They work for us, not the other way around.”

Well, Trump then told associates he had learned from allies that Isaacman had donated to Democratic Senators Mark Kelly of Arizona and former Senator Bob Casey of Pennsylvania, as well as the California Democratic Party, during the past two campaign cycles, and Trump told advisers he was surprised he had not been told about those donations previously, according to various reports.

That’s the reason why a talented man will not get the shot at making a difference.  So, so weak.

And then Isaacman came up again later…see below….

–The White House budget office on Tuesday urged Congress to cancel more than $9 billion in funding for global health and for public radio and TV stations, as President Trump seeks to assert more control over congressional spending authority.

—Trump signed a sweeping travel ban on 12 countries and introduced more-limited travel restrictions on seven others, the White House announced, reintroducing a controversial immigration policy that came to define the early days of his first term.

The ban, which Trump signed Wednesday evening, will completely bar travel to the U.S. by citizens of the following countries: Afghanistan, Myanmar, Chad, The Republic of the Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan and Yemen.

Citizens of Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan and Venezuela will additionally only be eligible for H-1B or other temporary work visas.

–Also Wednesday evening, Trump moved to block nearly all foreign students from entering the country to attend Harvard University, his latest attempt to choke the Ivy League school from an international pipeline that accounts for a quarter of the student body.

In an executive order, Trump declared that it would jeopardize national security to allow Harvard to continue hosting foreign students on its campus.

“I have determined that the entry of the class of foreign nationals described above is detrimental to the interests of the United States because, in my judgment, Harvard’s conduct has rendered it an unsuitable destination for foreign students and researchers,” Trump wrote in the order.

A further escalation of the White House’s fight with the nation’s oldest and wealthiest university.  A federal court in Boston blocked the Department of Homeland Security from barring international students at Harvard last week.  Trump’s order invokes a different legal authority.

Late Thursday, U.S. Federal Judge Allison Burroughs, based in Massachusetts, issued a temporary restraining order blocking the administration from enforcing a ban on Harvard accepting international students.

Harvard President Alan Garber also issued a statement saying that the Ivy League school was developing contingency plans for international students in the event they are not able to travel to campus.

–And also Wednesday, President Trump ordered a broad investigation into whether Joe Biden covered up a cognitive decline while in the White House and was incapable of executing presidential decisions – an unprecedented request that in theory could undermine thousands of Biden’s executive actions and pardons.

The order focused in part on whether Biden’s use of the autopen – a machine that uses real ink to duplicate a human signature – on executive actions was legitimate, or whether his aides used it to hide a president who was not cognitively capable of signing them himself.

Guidance issued by the Justice Department’s Office of Legal Counsel in 2005 determined that a president does not need to personally sign his signature on an official document for it to be considered valid.

“In recent months, it has become increasingly apparent that former President Biden’s aides abused the power of Presidential signatures through the use of an autopen to conceal Biden’s cognitive decline and assert Article II authority,” Trump wrote in his executive order.  “This conspiracy marks one of the most dangerous and concerning scandals in American history. The American public was purposefully shielded from discovering who wielded the executive power, all while Biden’s signature was deployed across thousands of documents to effect radical policy shifts.”

—

Jamie Dimon

JPMorgan Chase CEO Jamie Dimon has been making comments that he sees a crack in the bond market, it is “going to happen” after the U.S. government and Federal Reserve “massively overdid” spending and quantitative easing.

“I just don’t know if it’s going to be a crisis in six months or six years, and I’m hoping that we change both the trajectory of the debt and the ability of market makers to make markets,” Dimon said last Friday in remarks at the Reagan National Economic Forum.  “Unfortunately, it may be that we need that to wake us up.”

“I tell this to my regulators,” Dimon said.  “I’m telling you it’s going to happen, and you’re going to panic. I’m not going to panic, we’ll be fine. We’ll probably make more money and then some of my friends will tell me that we like crises because it’s good for JPMorgan Chase – not really.”

Dimon also said the U.S. should stockpile guns, ammunition and drones instead of bitcoin.

“We shouldn’t be stockpiling bitcoins,” Dimon said when asked about how industrial policy is entwined with national security policies during a panel discussion..

“We should be stockpiling guns, bullets, tanks, planes, drones, you know, rare earths. We know we need to do it. It’s not a mystery.”

Dimon also underscored during his remarks that he does not view China as America’s top adversary, and instead pointed his attention to the “enemy within” that could lead to the U.S.’ status as the world’s leader cratering.

“I’m not as worried about China,” Dimon said.  “China is a potential adversary. They’re doing a lot of things well, they have a lot of problems.  But what I really worry about is us. Can we get our own act together, our own values, our own capability, our own management?”

Dimon added: “I always get asked this question: Are we going to be the reserve currency?  No.  You know, if we are not the preeminent military and the preeminent economy in 40 years, we will not be the reserve currency. That’s a fact.  Just read history.”

He referred to the U.S. government as a “Leviathan” that is too weak to carry out policies, while simultaneously imposing “things on the American public that they’re getting sick of.”

Dimon argued that instead, the U.S. needs to celebrate its long-held values.

“Celebrate our virtues: freedom of speech, freedom of religion, freedom of enterprise, equal opportunity, family, God, country,” he said.

“You know, and you can acknowledge the flaws that we have, which are extraordinary – what we did to the Black population for years. Don’t denigrate the great things of this country, because those are two different things.”

“We don’t talk that much to each other – deal with our policies – this is the enemy within,” he continued.

“We’ve got to fix our permitting, our regulations, our immigration, our taxation, which I, I think they’re on their way. We have to fix our inner city schools, our health care system….”

—

Wall Street and the Economy

Starting over with the economic data for the week, before getting to the budget talk, the Street awaited the May jobs report, and it was solid, 139,000 vs. consensus of 129,000 [Econoday, my go to source], but March was revised downward from 185,000 to 120,000, and April from 177,000 to 147,000.  That said, the numbers the last three months aren’t worrisome.  It’s just that most economists think the impact of the tariff chaos is coming in the second half.

The Atlanta Fed’s GDPNow barometer for second quarter growth remains at 3.8%.

Average hourly earnings were solid, and a bit better than expected, 0.4%, 3.9% year-over-year, and the unemployment rate was unchanged at 4.2%.

President Trump posted on Truth Social:

“ ‘Too Late’ at the Fed is a disaster! Europe has had 10 rate cuts, we have had none. Despite him, our Country is going great.  Go for a full point, Rocket Fuel!”

Earlier, we had two poor ISM readings for May, with manufacturing at 48.5 vs. 48.7 prior, and below estimates (50 the dividing line between growth and contraction), while the service sector figure was 49.9 when 52.0 was expected.  Not good.  The same day, Wednesday, we had a poor ADP jobs report*, 37,000 vs. 110,000 consensus, and between the ISM non-manufacturing number and this, the yield on the 10-year Treasury fell to 4.35% from 4.45% just two days earlier, the soft numbers giving hope to traders expectations the Fed will cut rates sooner than thought.

*Following this report, Trump posted on Truth Social:

“ADP NUMBERS OUT!!! ‘Too Late’ Powell must now LOWER THE RATE.  He is unbelievable! Europe has lowered NINE TIMES!”

April construction spending fell 0.4%, factory orders -3.7%, both below forecasts.

And I never report on the trade deficit, because it really doesn’t matter and doesn’t move markets, but the April deficit narrowed to $61.6 billion, according to the Commerce Department, its lowest level since September 2023.  That was down sharply from the record $138.3 billion it hit in March, when businesses were racing to beat the tariffs Trump would impose April 2.

Economists said that businesses were working through their inventories that they had been rushing to purchase the first quarter. But with all the tariff uncertainty still out there, this figure is likely to remain highly volatile.

One more.  The New York Fed’s Regional Business Survey of companies in New York and Northern New Jersey found that roughly 75% facing higher costs passed them along to consumers, with nearly a third of manufacturers and about 45% of service firms passing along their entire cost.

The survey was done before Trump reduced levies on Chinese imports to 30% from 145%.

Freddie Mac’s 30-year fixed-rate mortgage is at 6.85%.

Next week, May inflation readings, CPI and PPI, and a consumer sentiment update.

Meanwhile, the OECD (Organization of Economic Cooperation and Development), a Paris-based organization comprised of the 38 largest, market-based countries released its latest global outlook Monday and said Donald Trump’s combative trade policies have tipped the world economy into a downturn, with the U.S. among the hardest hit.

The OECD slashed its global forecasts for the second time this year, citing the impact of the tariff onslaught.  The combination of trade barriers and uncertainty are hitting confidence and holding back investment, while also warning that protectionism is adding to inflationary pressures.

The OECD now forecasts global economic growth will slow to 2.9% this year from 3.3% in 2024.  It expects the rate of expansion in the U.S. will tumble further, to 1.6% from 2.8% – an outlook that is significantly lower than its projection in March.

The European Union is forecast to grow 1.0%, while China’s growth rate is pegged at 4.7%.

—

On the budget front, the Senate returned from its recess to address the bill the House handed them.

President Trump posted on Truth Social Monday evening:

“So many false statements are being made about ‘THE ONE, BIG, BEAUTIFUL BILL,’ but what nobody understands is that it’s the single biggest Spending Cut in History, by far!  But there will be NO CUTS to Social Security, Medicare, or Medicaid.  In fact, they will be saved from the incompetence of the Democrats. The Democrats, who have totally lost their confidence and their way, are saying whatever comes to mind – Anything to win!  They suffered the Greatest Humiliation in the History of Politics, and they’re desperate to get back on their game, but they won’t be able to do that because their Policies are so bad.  In fact, they would lead to the Destruction of our Country, and almost did. The only ‘cutting’ we will do is for Waste, Fraud, and Abuse, something that should have been done by the incompetent, Radical Left Democrats for the last four years, but wasn’t.”

Well, about half of the above is true.

Trump then went after Senator Rand Paul (R-Ky.), who has expressed his misgivings on the bill, the president posting:

“Rand votes NO on everything, but never has any practical or constructive ideas.  His ideas are actually crazy (losers!). The people of Kentucky can’t stand him.  This is a BIG GROWTH BILL!”

“Rand Paul has very little understanding of the BBB, especially the tremendous GROWTH that is coming.  He loves voting ‘NO’ on everything, he thinks it’s good politics, but it’s not.  The BBB is a big WINNER!!!”

But then Elon Musk posted Tuesday on his X social-media platform, calling the “big, beautiful” tax and spending package a “disgusting abomination.”

“Shame on those who voted for it: you know you did wrong.  You know it,” said Musk, calling it a “massive outrageous, pork-filled Congressional spending bill.”

[Of course Mr. Musk has an interest in the legislation, in that it eliminates the EV credit so critical to Tesla.]

As of Wednesday, Republican Sens. Ron Johnson, Mike Lee, Rick Scott and Rand Paul were demanding deeper cuts, Paul also objecting to the debt-limit increase included in the package, saying both he and Musk “have seen the massive waste in government spending and we know another $5 trillion in debt is a huge mistake. We can and must do better.”

The Senate will make some changes and then send it back to the House.

“The Senate must make this bill better,” Sen. Lee wrote in a response to Musk’s post.

Trump “already knows where Elon Musk stood on this bill,” White House press secretary Karoline Leavitt told reporters on Tuesday when asked about Musk’s social-media post.  “It doesn’t change the president’s opinion.”

Conservative spending hawks in the House are worried about changes to the bill after the Senate works on it.  Under heavy pressure from the president and his MAGA base, they had held their noses and voted for the bill last month, hoping the Senate would shift the massive package closer to being deficit neutral.

Instead, the opposite is now expected to happen, as moderate GOP senators leery of the House Medicaid cuts and efforts to phase out green energy subsidies seek to restore some of those benefit programs, possibly making the bill even more costly.  Majority Leader John Thune can only afford to lose three votes with a 53-47 majority.

Rep. Chip Roy (R-TX), a prominent spending hawk, said GOP senators “can’t unwind what we achieved” in the House or the bill would face a tough path upon its return to the House.  “And those are going to be red lines.”

Majority Leader Thune believes the deal that led the House to increase the maximum deduction for state and local taxes (SALT) to $40,000 will have to be changed in his chamber, according to his office.  This would likely be a problem in the House if it was, say, less than $30,000.

The Congressional Budget Office said Wednesday that the bill passed by the House would add $2.4 trillion to the national debt over the next decade.

To defend their legislation, some Republicans and White House aides have taken to attacking the CBO as politically motivated and unreliable. But several nonpartisan independent groups that have analyzed the bill have also concluded that it would add significantly to the federal debt.

Well, Elon Musk then escalated his attack on the bill, posting on X.

“Call your Senator. Call your Congressman.  Bankrupting America is NOT ok!  KILL THE BILL”

“A new spending bill should be drafted that doesn’t massively grow the deficit and increase the debt ceiling by 5 TRILLION DOLLARS”

“Interest payments already consume 25% of all government revenue.  If the massive deficit spending continues, there will only be money for interest payments and nothing else!  No social security, no medical, no defense…nothing.”

In the Oval Office on Thursday, Trump, meeting with German Chancellor Friedrich Merz, accused Musk of changing his tune on the legislation once he stepped down as a top White House adviser.

“I’m very disappointed because Elon knew the inner workings of this bill better than almost anybody sitting here.” And… “He only developed the problem because he knew we had to cut the EV mandate,” Trump said.  The president also acknowledged that Musk was angry about his decision to withdraw the nomination of Elon’s key ally, Jared Isaacman.

And then the Musk-Trump relationship really exploded, before Trump had even finished speaking in the Oval, the two trading barbs and insults for hours, a full rupture in what had been one of the most consequential relationships in modern American politics.

Musk on X:

“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,” he wrote, adding, “such ingratitude.”

[Musk spent $250 million on Trump’s presidential campaign.]

Among Trump’s replies on Truth Social:

“I don’t mind Elon turning against me, but he should have done so months ago.  This is one of the Greatest Bills ever presented to Congress.  It’s a Record Cut in Expenses, $1.6 Trillion Dollars, and the Biggest Tax Cut ever given.  If this Bill doesn’t pass, there will be a 68% Tax Increase, and things far worse than that.  I didn’t create this mess, I’m just here to FIX IT. This puts our Country on a Path of Greatness.  MAKE AMERICA GREAT AGAIN!”

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.  I was always surprised that Biden didn’t do it!”

“Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!”

[Musk posted: “False, this bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!”]

Trump suggested Musk was suffering from “Trump derangement syndrome” and that his opposition to Trump’s legislative agenda was because of the rollback of EV tax credits in the measure.

Tesla shares cratered 14%, Thursday, a market-value decline of around $152.4 billion, its biggest one-day slide on record. Musk’s personal wealth dropped by $34 billion.

Among Elon’s other posts on X:

“The Trump tariffs will cause a recession in the second half of this year.”

“Time to drop the really big bomb: @realDonaldTrump is in the Epstein files.  That is the real reason they have not been made public.  Have a nice day, DJT!”

[Ed. There is zero evidence Donald Trump had anything to do with Epstein’s crimes.]

“This just gets better and better.  Go ahead, make my day…”

Musk mused about starting a new political party and encouraged Republicans to side with him in his spat with Trump.

“Is it time to create a new political party in America that actually represents the 80% in the middle?”

“Keep the EV/solar incentives cuts in the bill, also cut all the crazy spending increases in the Big Ugly Bill so that America doesn’t go bankrupt!”

“In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately.”

[Ed. this one was perhaps the most insane, and reckless, of them all.]

Steve Bannon, who has been one of the most vocal critics of Musk for months, said he is advising the president to cancel all of Musk’s contracts and launch several investigations into the world’s richest man.

“They should initiate a formal investigation of his immigration status because I am of the strong belief that he is an illegal alien, and he should be deported from the country immediately,” he said in a phone interview.  Bannon said the administration should also investigate Musk’s drug use, and his effort to get a classified briefing on China from the Pentagon.  Bannon said Musk’s security clearance should be suspended during these investigations.

Then hours after saying he would end use of SpaceX’s Dragon spacecraft, Musk reversed course and signaled there could be a cooling-off period between Trump and the world’s richest man.

“This is a shame this back and forth.  You are both better than this.  Cool off and take a step back for a couple days,” an X user who had just 200 followers on the platform wrote in replay to Musk’s post about Dragon.

“Good advice,” Musk responded. “Ok, we won’t decommission Dragon.”

In a separate reply to billionaire Bill Ackman, an ally of both Trump and Musk who said they should “make peace for the benefit of our great country,” Musk responded: “You’re not wrong.”

Politico reported White House aides scheduled a call with Musk for Friday in an effort to take down the temperature.  But the White House denied it would hold a call, and there were stories Trump was looking to dump the Tesla he bought to support Musk three months ago.

In a call with ABC News Friday morning, Trump called Musk “the man who has lost his mind” and said that he is “not particularly” interested in talking to him.

—

Europe and Asia

We had the May PMIs for the eurozone, courtesy of S&P Global and Hamburg Commercial Bank, with manufacturing at 49.4, a 33-month high.  The non-manufacturing/service sector reading was 49.7, 6-mo. low.

Germany: mfg. 48.3; services 47.1, 30-mo. low
France: mfg. 49.8, 28-mo. high; services 48.9
Italy: mfg. 49.2; services 53.2
Spain: mfg. 50.5; services 51.3
Ireland: mfg. 52.6; services 54.7
Netherlands: mfg. 49.0
Greece: mfg. 53.2

UK: mfg. 46.4; services 50.2

 Dr. Cyrus de la Rubia, Chief Economist at HCB:

“The upward trend in the headline (mfg.) PMI is still continuing, pointing towards a recovery that is progressing. That is backed up by the rise in production we have seen since March. What is especially encouraging is that production has picked up across all four major eurozone economies, which really highlights how broad-based this recovery is. With output rising for three months in a row, historical patterns suggest there is a 72% chance we will see another increase in the next month.  Of course, one big risk on the horizon is the possibility of the U.S. significantly hiking tariffs on EU imports.  That could definitely cast a shadow over the outlook.  Still, companies are noticeably more upbeat than they were last month about producing more a year from now, which shows a certain resilience, even in the face of potential protectionist moves from across the Atlantic.”

We also had a flash estimate on May inflation for the euro area, ahead of the European Central Bank meeting Thursday.  The estimate is for 1.9%, down from 2.2% in April, according to Eurostat, and 2.4% ex-food and energy, down from 2.7%.  Very positive.

Headline inflation….

Germany 2.2%, France 0.9%, Italy 2.0%, Spain 2.2%, Netherlands 4.1%, Ireland 2.0%.

Eurostat also released the unemployment picture in the EA20 for April, 6.2%, down from 6.3% in March.

Germany 3.6%, France 7.1%, Italy 5.9%, Spain 10.9%, Netherlands 3.8%, Greece 8.3% (10.8% year ago), Ireland 4.1%.

And Eurostat released April industrial producer price data for the euro area, -2.2% over March, up 0.7% year-over-year.  April retail sales rose 0.1% M/M, 2.3% Y/Y.

Thursday, the European Central Bank then cut its key interest rate to the lowest level since early 2023, a response to slowing inflation and threats to the region’s growth from President Trump’s trade war.

The ECB cut its deposit rate to 2% from 2.25%, its eighth reduction in a year.  The move deepens a divergence with the U.S. with benchmark borrowing costs now more than 2 percentage points lower in Europe.  As noted above, that gap has become ammunition for Trump’s criticism of the Fed, which hasn’t cut rates this year.

The ECB cut its inflation forecasts, now expecting price growth to fall to its target of 2% this year and reach 1.6% next year.  The outlook for growth is being muddled by roller-coaster U.S. tariff policy.

Netherlands: Far-right lawmaker Geert Wilders pulled his Freedom Party out of the ruling coalition, causing the government to collapse and triggering a snap election.

Wilders left over the refusal of his three coalition partners to agree to his plans to curb migration, which included closing the border to asylum seekers, temporarily halting family reunification and returning asylum seekers to Syria.  His move automatically triggers a new ballot.

This is an old issue in the Netherlands.

Turning to Asia…China’s National Bureau of Statistics released its May PMI readings; manufacturing 49.5, services 50.3. The private Caixin manufacturing reading was just 48.3 vs. 50.4 prior, and a consensus estimate of 50.6, so a huge miss as these things go.  Reminder, the NBS readings are of large, state-owned enterprises, while Caixin is largely small- and mid-sized businesses.  The Caixin service sector figure was 51.1, in line with expectations.

Meanwhile, Beijing plans to allocate 500 billion yuan ($70 billion) that could be used to fast-track new infrastructure projects, a move that’s seen as a bulwark against U.S. tariffs.  Under the so-called “new financing policy tool,” the nation’s three policy banks will raise funds and buy stakes in projects. The policy lenders may issue bonds or use other methods to tap financing.

Japan’s May PMIs had manufacturing at 49.4, services 51.0.

April household spending fell 1.8% over March, -0.1% year-over-year, both figures way below consensus.

Separately, the number of newborns in Japan is decreasing faster than projected, with the number of annual births falling to another record low last year, according to government data released Wednesday.

The Health Ministry said 686,061 babies were born in Japan in 2024, a drop of 5.7% on the previous year and the first time the number was below 700,000 since records began in 1899.  It’s the 16th straight year of decline.  Yikes.

In 1949, there were 2.7 million births during the postwar baby boom.

South Korea: mfg. PMI for May was 47.7.
Taiwan: mfg. PMI in the month was 48.6.

Street Bytes

—Stocks finished up a second week, today’s economic news helping.  I think it’s a bit overdone at this point, but that’s partly because I think the odds of Vladimir Putin doing something truly heinous in Ukraine, beyond what he already has, have gone up.  I’ll leave it at that.

The Dow Jones rose 1.2% to 42762, the S&P 500 1.5% and Nasdaq 2.2%.

The S&P, at 6000, is now four points over the level before Donald Trump’s inauguration, so you are likely to see a post on that in the next 24 hours.

Going back to May’s returns on the major indices, for the S&P and Nasdaq, it was their biggest monthly gain since November 2023, with the S&P up 6.2% and Nasdaq 9.6%, after April’s turmoil.  The Dow Jones finished up 3.9% for May.

—U.S. Treasury Yields

6-mo. 4.29%  2-yr. 4.01%  10-yr. 4.51%  30-yr. 4.96%

When all was said and done, after Wednesday’s weak economic data pulled Treasury yields down, the solid jobs report today brought them back up, all the way to 4.51% on the 10-year, up 11 basis points on the week.  The Fed isn’t cutting anytime soon.

—Oil futures rose Monday back over $62 on West Texas Intermediate, after OPEC+ announced it would raise output in July by the same amount as in the previous two months, easing concerns among those who had feared a larger increase.  The group agreed on Saturday to add 411,000 barrels a day of supply, reinforcing a major strategic shift that has sent crude prices sinking.  This move is perceived as a measure to discipline countries that have been overproducing, such as Iraq and Kazakhstan, while allowing oil producers like Saudi Arabia and Russia to win back market share.

And then you had increasing geopolitical risks, such as Ukraine’s attack on four military airports inside Russia, destroying over 40 warplanes, while Russia pounded Ukraine with missiles and drones. At the same time, Iran said Monday it was poised to reject a U.S. proposal to end a decades-old nuclear dispute, arguing that it fails to meet Tehran’s interests or ease Washington’s stance on uranium enrichment.

And the wildfires in Canada have forced the temporary shutdown of some oil and gas production in Alberta.

Oil moved higher at week’s end, over $64, on the U.S. labor report and signs that Washington and Beijing will resume their trade talks.

—Four major automakers are racing to find workarounds to China’s stranglehold on rare-earth magnets, which they fear could force them to shut down some car production within weeks.

The Wall Street Journal reported that “Several traditional and electric-vehicle makers – and their suppliers – are considering shifting some auto-parts manufacturing to China to avoid looming factory shutdowns, people familiar with the situation said.”

That would be quite ironic, automakers shifting some production to China, after President Trump initiated the trade war as a way of forcing companies to bring manufacturing back to the U.S.

“If you want to export a magnet [from China] they won’t let you do that.  If you demonstrate that the magnet is in a motor in China, you can do that,” said a supply-chain manager at one of the carmakers.

–Meanwhile, Ford saw big sales gains in May as price cuts and shedding inventories blunted the effect of President Trump’s auto tariffs.  The question is how long they can maintain pricing in lieu of trade deals, which have been elusive.

Ford reported sales jumped 16.3% in May to just under 221,000 units, the automaker’s best May since 2019 and the third straight month of sales gains. Truck sales surged 16% compared to a year ago, led by F-series pickups, Ranger midsize pickups, and the Maverick compact pickup.

Ford’s hybrid sales jumped 29% to nearly 23,000 units, a new sales record.  The only down note was the F-150 Lightning EV, which saw sales drop 42%, leading Ford’s overall EV sales to fall 25%.

GM and Stellantis do not report monthly sales.

Toyota reported an increase of 6.8% in May to 240,176 units, led by gains in its car and truck segments.  The Camry is still popular with Americans, with a 16.5% rise vs. a year ago following the release of an updated version.  Same for the Prius hybrid, with the updated version readily available compared to last May.

Hyundai and Kia also reported sales gains in May, with Hyundai’s up 8%, and Kia’s 5%.

–The Federal Reserve lifted the asset cap on Wells Fargo, a restriction in place since 2018 due to widespread consumer abuses.

Federal regulators moved to lift an unprecedented punishment that had handcuffed growth at WFC, a milestone in the bank’s efforts to repair its tarnished reputation after its fake-accounts scandal erupted nearly a decade ago.

The Fed had capped the bank assets at around $2 trillion.  It was the most severe rebuke handed down after the bank’s disclosure it had opened millions of unauthorized customer accounts.  The 2018 order had pointed to “widespread consumer abuses and compliance breakdowns.”

So now, for the first time in seven years, the fourth-largest U.S. bank will be able to grow its balance sheet and reclaim resources it poured into efforts to fix itself.  It will once again have the freedom to gather deposits, increase loans to companies and households and grow its Wall Street businesses or even do deals.

Other provisions from the 2018 order “will remain in place until the bank satisfies the requirements for their termination,” the Fed said in a statement.  The asset-cap removal “reflects the substantial progress the bank has made in addressing its deficiencies.”

—Newark Liberty Airport reopened its other main runway after construction work was completed two weeks early…Transportation Secretary Sean Duffy taking a well-deserved bow.  #Duffy2028.

TSA checkpoint numbers vs. 2024

6/5…110 percent of 2024 levels
6/4…99
6/3…81
6/2…94
6/1…117
5/31…85
5/30…102
5/29…107

—About 1.9 million foreigners arrived at the U.S.’s main airports in the past four weeks, down 6% from the same period last year, according to data from U.S. Customs and Border Protection. Airline bookings data for the summer suggest things won’t be picking up soon.  Flight bookings to the U.S. from Europe are down by about 12% through August.  San Francisco, Washington, D.C., and Los Angeles are seeing even larger declines, according to an analysis of online travel-agency booking data from Cirium.

Overseas travelers say they are swapping U.S. vacation plans for trips to Europe or in their own countries.  Some cite the Trump administration’s immigration crackdown and reports of foreign visitors being detained or deported from the U.S.  Others say they want to signal their discontent with the White House’s policies, echoing boycotts of American-made products by Canadians and Teslas in Europe.

Air travel from Canada to the U.S. in April dropped 20%, while land crossings dropped 35%, according to the Canadian government.

—Procter & Gamble said on Thursday it would cut 7,000 jobs, or about 6% of its total workforce over the next two years, as part of a new restructuring plan to counter uneven consumer demand and higher costs due to tariff uncertainty.

The Pampers maker’s move comes as consumer spending is expected to remain pressured this year, and global consumer goods makers including P&G and Unilver brace for a further hit to demand from even higher prices.

I know one thing…demand for Pampers in Japan is falling.

—Dollar Tree shares fell 6% after the discount retailer warned of a hit to its current-quarter profit because of tariffs. [The stock recovered some the next day.]

The company posted first-quarter adjusted earnings per share of $1.26 on net sales that increased 11% year-over-year to $4.64 billion.  Both the Street’s estimates.

And comparable store sales rose by 5.4%, also better than expected.

DLTR held its full-year sales outlook steady but increased its adjusted EPS forecast to $5.15 to $5.65 from the prior $5.00 to $5.50 range, reflecting more than $500 million in stock buybacks the company has taken year-to-date.  Dollar Tree is benefiting from lower freight costs (see the falling price of diesel) and resilient demand for affordable essentials.  Your editor still goes to DLTR for items like dishwashing liquid (I think I’ve used a dishwasher twice in my life), bar soap, Campbell’s chicken soup, scrub brushes, toilet bowl cleaner and other stuff…though not as much as before.

For the second quarter, the company expects comp net sales growth “towards the higher end” of its 3% to 5% full-year forecast.  But…adjusted EPS is seen down possibly 45% to 50% year-over-year as Dollar Tree works to mitigate and absorb the cost of tariffs.  The company said it expects “some earnings volatility” before adjusted EPS rises in the third and fourth quarters.

As for the effort to sell its Family Dollar brand to a pair of private-equity firms for $1 billion, DLTR said it is expected to close in the second quarter.

–Prego pasta sauce maker Campbell’s Co. beat third-quarter sales and profit estimates on Monday, helped by strong demand for its popular canned food and soups as consumers increasingly prefer to eat at home in the face of the uncertain economy.  As you’ve seen, consumer sentiment has largely been trending down.

“Consumers are cooking at home at the highest levels since early 2020 and turning to our brands for value, quality and convenience,” said Campbell’s CEO Mick Beekhuizen.

The company maintained its fiscal 2025 forecast for net sales growth in the range of 6% and 8%. It did, however, project annual adjusted profit per share will come in at the lower end of its prior forecast range of $2.95 and $3.05, owing to weak demand for snacks.

Campbell’s, which excluded tariffs from its forecast, did say it expected a hit of between 3 and 5 cents per share, accounting for levies already in place.

Volumes for the company’s meals and beverages unit rose 7% during the quarter ended April 27, while its snacks business reported a 5% fall.

Campbell’s has introduced new products such as the Milano white chocolate cookies through its Pepperidge Farm brand and Pop’ums, a snack hybrid combining pretzels and popcorn, to revive demand in its snacks business.  Huh…haven’t seen Pop’ums at my local grocery stores.

But regarding the new Milano cookie, as Homer Simpson would say, “Mmmm…white…chocolate…”

Campbell’s shares were unchanged on the news.

—Lululemon Athletica’s fiscal first quarter topped earnings and sales expectations, but the shares fell heavily on the open, Friday, some 20%, because the company lowered profit guidance for the year and posted weak same-store sales growth.

The athletic-apparel maker reported earnings of $2.60 a share for the quarter ended May 4, with the Street at $2.58.  Revenue rose 7% year-over-year to $2.37 billion, slightly better than consensus.  Same-store sales rose by 1% from last year, while expectations were for a 4.1% increase.

LULU now sees full-year earnings ranging from $14.58 to $14.78, down from a prior guidance of $14.95 to $15.15.  Second-quarter earnings guidance was also soft.

The company said it has plans to offset the tariff impact, including taking “strategic price increases” and more efficiency in sourcing, but these will provide more relief in the second half of the year than the first half.

“In the U.S., consumers remain cautious right now,” said CEO Calvin McDonald on a call with investors.  “They are being very intentional about their buying decisions.”

—Electricity rates in my state of New Jersey are going up by 17.2 and 20.2 percent, retroactive to June 1.  Though Democrats are seeking to keep the actual billing of the increase until after the November gubernatorial election.  As in the rate hike would accrue until then.  This is bogus.

–Boy, the late Dr. Bortrum, one of the very first in the world to work on lithium-ion batteries, would get a kick out of the next story…the batteries being rather explosive (thus shower heads in the hallways at Bell Labs…if you caught fire, you’d run into the hall and take a shower).

A ship carrying about 3,000 cars to Mexico was abandoned in the middle of the Pacific Ocean after catching fire Tuesday.

The ship’s manager, Zodiac Maritime, said in a statement about 800 of the vehicles were EVs.

The U.S. Coast Guard evacuated all 22 crew members, transferring them to a nearby merchant ship.  The crew had been fighting the fire.

Zodiac confirmed that responders are being deployed to support salvage and firefighting operations, though a fire with 800 EVs would be impossible to put out.  [Look how long it takes firemen to put out a single EV fire, and that is outdoors.]  The ship departed the Chinese port of Yantai on May 26.

–Restaurant chain Hooters abruptly closed over 30 locations across multiple states June 4.  So many beautiful, sexy women losing their jobs…a real shame.

But the company, which filed for bankruptcy in late March, has vowed to persevere, with about 300 remaining locations.

—Circle Internet Group, the leader in the world of stablecoins, closed its first day of trading up nearly 170%, in a sign that crypto mania is back.

Circle (CRCL) listed 34 million shares on the New York Stock Exchange, opening at $69 a share and quickly soared to $103.75, or 235% above its initial public offering price of $31 a share.  The stock closed at $83.34, a 168% gain.

Circle is the issuer of USDC, a cryptocurrency pegged to the U.S. dollar whose price hovers around $1, hence its classification as a stablecoin.  Stablecoins like USDC and Tether’s rival USDT token are considered better for payments and settlements, since their prices don’t fluctuate as wildly as Bitcoin and Ethereum.

–We note the passing of one of the most influential economists of recent decades, Stanley Fischer, 81.

Fischer served as vice chairman of the Federal Reserve from 2014 to 2017.  He left his biggest mark in prior decades as professor of economics at MIT, second in command at the International Monetary Fund and governor of the Bank of Israel, which confirmed his death.

In those roles, Fischer helped shape how an entire generation of central bankers and economic policymakers do their jobs.

As the Wall Street Journal reported:

“Fischer’s influence was felt mostly through his teaching, mentorship and writing, including an influential textbook written with fellow MIT professor Rudiger (Rudi) Dornbusch. It ‘made me see the link between all the math and theory and actual policy with a far greater clarity than I ever had before,’ Larry Summers, a student of Fischer’s, and later Treasury Secretary under Bill Clinton and adviser to Barack Obama, said in an interview Sunday.

“Fischer’s other students included Ben Bernanke, Fed chair from 2006 to 2014; Mario Draghi, president of the European Central Bank from 2011 to 2019; Kazuo Ueda, the current governor of the Bank of Japan; and Olivier Blanchard, an influential macroeconomist and chief economist at the IMF.”

Foreign Affairs

Russia/Ukraine:  Last weekend, Ukraine launched a brilliant clandestine drone attack on four military airports inside Russia, delivering the biggest blow of the war against Moscow’s long-range bomber fleet. As The Guardian put it: “The spectacular operation, known as Spiderweb, was prepared in secret over 18 months.  Ukraine’s agents moved short-range drones and explosives inside Russia before they were launched remotely for a coordinated strike on Sunday that was intended to strike at Moscow’s air superiority.”

The operation’s 117 drones hit more than one-third of “the strategic cruise missile carriers stationed at airbases,” Ukrainian President Volodymyr Zelensky told reporters.

The drones were reportedly smuggled into the country hidden in trucks, with one of the bases hit in the Irkutsk region of Siberia, almost 2,500 miles from Ukraine.  The drones were hidden under the roofs of mobile wooden cabins, already placed on the trucks, according to reports.  And then at the right moment, the roofs of the cabins were opened remotely, and the drones flew to hit the bombers and other aircraft.

Ukrainian sources said more than 40 aircraft were hit, including some of Moscow’s huge strategic bombers.

Ukraine has attacked such aircraft before, but never on such a scale.  Videos appear to show attack drones homing in on their targets as they sat on the tarmac.

The same strategic bombers that were hit have been hammering Ukrainian targets – civilian and military, for nearly three years.

A Russian military blogger described the attack as a “black day for Russian long-range aviation.”

But the drone attack was also a warning for the U.S.  The American homeland is vulnerable to drone and missile strikes.

“Could those have been B-2s [Ed. stealth bombers] at the hands of Iranian drones flying out of containers, let alone Chinese?” military analyst Fred Kagan asked. The Wall Street Journal showed an aerial photo of B-52 bombers lined up at Barksdale Air Force Base in Louisiana.  The story is the same for fighter jets and aircraft carriers.

As the Journal editorialized: “Ukraine did the U.S. a favor by destroying bombers of a U.S. adversary – and sending America a wakeup call about its own complacency.”

And then you had the collapse of two Russian railroad bridges, one of which killed seven people.  It was not immediately clear whether these were among the dozens of incidents of sabotage since Russia invaded Ukraine in 2022, but Russian officials said they were “acts of terrorism” and caused by explosives.

The first bridge, in the Bryansk region on the border with Ukraine, collapsed on top of a passenger train on Saturday, causing the casualties.

Hours later, officials said a second train derailed when the bridge beneath it collapsed in the nearby Kursk region, which also borders Ukraine.  An explosion apparently collapsed the bridge, the local acting governor said Sunday. There were no casualties.

Ukraine’s military intelligence GUR, said Sunday that a Russian military freight train carrying food and fuel had been blown up on its way to Crimea.  It did not claim the attack was carried out by the GUR or mention the bridge collapses.

The statement said Moscow’s key artery with the Russian-occupied Zaporizhzhia region and Crimea has been destroyed.

And on Monday, Ukrainian officials claimed to have carried out a new attack on the 12-mile Kerch Strait Bridge, which links Crimea with the Russian mainland.  Kyiv’s Defense Ministry said Ukrainian elements executed “a new, unique special operation and struck…this time underwater!” Explosives were allegedly placed on the bridge’s support columns, “And today, at 4:44 a.m., without any civilian casualties, the first explosive device was detonated!” the Defense Ministry said.  “The bridge is now in critical condition.”

Russia has used the bridge as a logistical artery to supply its troops.

Ukraine suffered as well.  A Russian missile struck a Ukrainian military training base, killing at least 12 soldiers.  Hours before that strike, Russia launched what Ukrainian officials said was the largest combined overnight aerial assault on the country since the start of the war, some 472 drones.

Three people were killed and 10 more were injured in Ukraine’s Kherson region.  The head of the region’s military administration said the “Russian military hit critical and social infrastructure” as well as “residential areas of settlements in the region.”

One person was killed in the Sumy region.

—The two nations sent low-level delegations to meet in Istanbul on Monday for just over an hour.  The two sides agreed to “swap all severely wounded and ill prisoners of war and to exchange the bodies of thousands of fallen soldiers,” ABC News reported, citing Ukrainian Defense Minister Rustem Umerov, who added that the sides also discussed a possible meeting between Zelensky and Russian President Vladimir Putin.

President Zelensky said 1,000 prisoners would be returned by each side, and the two would exchange the bodies of 6,000 fallen soldiers each.

Ahead of the Istanbul meeting, Ukraine shared its peace terms with Moscow, but Russia did not reciprocate and presented its terms only on Monday.

Ukraine continues to call for a full 30-day ceasefire during which time peace negotiations can take place.  Russia had refused the request, with Putin and his top officials retaining maximalist war goals dating back to the opening days of the Russian invasion.  After the talks ended, Russian stated news agencies published Moscow’s peace terms:

They included Ukraine’s recognition of Russia’s territorial gains, the shrinking of Ukraine’s military, designation of Russian as Ukraine’s official language, and a formal commitment to Ukrainian neutrality, which would rule out joining NATO.

Of course these are non-starters back in Kyiv.

President Zelensky said: “Without the meeting of the leaders there will be no cease-fire.”

—Two senior U.S. senators warned Sunday that Vladimir Putin was stalling at the peace table while preparing a new military offensive in Ukraine, arguing the next two weeks could shape the future of a war that has already smashed cities, displaced millions and redrawn Europe’s security map.

Republican Sen. Lindsey Graham and Democratic Sen. Richard Blumenthal met with President Zelensky in Ukraine and toured neighborhoods shattered by what they called the worst Russian bombardments since the full-scale invasion began.

Later, in Paris for talks with French President Emmanuel Macron – who they say is “100% aligned” with them on the war – the senators warned the window to prevent a renewed assault is closing.

A sweeping U.S. sanctions bill could be the West’s last chance to choke off the Kremlin’s war economy, they said – adding that they hope their firsthand findings will shift momentum in Washington and help bring a skeptical President Donald Trump on board.

“What I learned on this trip was he’s preparing for more war,” Graham said of Putin.  Blumenthal called the sanctions proposed in legislation “bone-crushing” and said it would place Russia’s economy “on a trade island.”

“It is crunch time for Putin and for the world because Russia is mounting a new offensive,” he said.

At the heart of their push is a bipartisan sanctions bill, backed by nearly the entire U.S. Senate.  It would impose 500% tariffs on countries that continue buying Russian oil, gas, uranium and other exports – targeting nations like China and India that account for roughly 70% of Russia’s energy trade and bankroll much of its war effort.

Graham called it “the most draconian bill I’ve ever seen in my life in the Senate.”

“Putin is playing President Trump,” Blumenthal said.  “He’s taking him for a sucker.”  The senator said Putin “is, in effect, stalling and stonewalling, prolonging the conversation so that he can mount this offensive and take control of more territory on the ground.”

Graham added: “We saw credible evidence of a summer or early fall invasion, a new offensive by Putin. …He’s preparing for more war.”

Regarding the looming offensive, “Military analysts say that if Russia advanced 12 miles into Ukraine, its forces could target the city of Sumy with short-range weapons like small exploding drones,” the New York Times reported.  “Such attacks in Kherson, in southern Ukraine, have killed at least 150 civilians; a United Nations commission said last week that those attacks amounted to crimes against humanity.”

—Wednesday afternoon, Trump put out on Truth Social:

“I just finished speaking, by telephone, with President Vladimir Putin, of Russia.  The call lasted approximately one hour and 15 minutes.  We discussed the attack on Russia’s docked airplanes, by Ukraine, and also various other attacks that have been taking place by both sides. It was a good conversation, but not a conversation that will lead to immediate Peace. President Putin did say, and very strongly, that he will have to respond to the recent attack on airfields. We also discussed Iran, and the fact that time is running out on Iran’s decision pertaining to nuclear weapons, which must be made quickly!  I stated to President Putni that Iran cannot have a nuclear weapon and, on this, I believe we were in agreement.  President Putin suggested that he will participate in the discussions with Iran and that he could, perhaps, be helpful in getting this brought to a rapid conclusion.  It is my opinion that Iran has been slowwalking their decision on this very important matter, and we will need a definitive answer in a very short period of time!”

It was unclear whether Trump urged Putin not to launch a retaliatory attack on Ukraine, as the president’s goal is to see the war end.

Editorial / Wall Street Journal

“JD Vance likes to say that Ukraine isn’t winning its war with Russia, which the Vice President seems to think is an argument for withdrawing U.S. military support. But if the will to fight is worth something, then Ukraine is still showing its mettle as it tries to repel the Kremlin’s designs for conquest.

“Ukraine’s daring weekend drone attack on military bases deep inside Russia is a brilliant example of creativity and resolve.  Ukraine sources say it was able to smuggle drones across Russia, fire them at close proximity to air bases, and destroy numerous aircraft. The planes reportedly included bombers that fire cruise missiles at Ukraine and some that can carry nuclear payloads.

“It isn’t clear how many planes were destroyed, but there was enough damage that Russia’s defense ministry felt obligated to acknowledge the strikes. Bases were hit in Siberia and in the far Russian east.

“The drone raids won’t alter the course of the war, but they show the ability of Ukraine to strike far from its border with Russia.  The intelligence required to pull off the operation, supposedly in the planning for 18 months, is also reason for the Kremlin to be discomfited.  Did Ukraine have some Russian help?

“Ukraine suffered a setback on Sunday when a Russian missile attack on a military training site killed a dozen people and wounded many more.  Russia still has the advantage in firepower, especially in missiles that need to be intercepted with Ukraine’s dwindling supply of air-defense interceptors.  The Trump Administration says it wants to stop the killing, but the best way to do that is to supply more air defenses to Kyiv….

“It’s time for Sens. Lindsey Graham and Richard Blumenthal to move their bill sanctioning countries that buy oil and gas from Russia.  Republicans want to defer to Mr. Trump, but Senators aren’t potted plants.  Sooner rather than later, they need to show they mean what they say about helping a desperate ally fight for its freedom against a marauding dictator who won’t stop if he succeeds in Ukraine.”

—Thursday night, Russia launched another massive attack across six regions in Ukraine, a reported 407 drones and 44 missiles in one of the largest coordinated attacks of the war.

At least four people were killed.

President Zelensky said Russia “must be held accountable” for the strikes, which he says targeted “almost all of Ukraine,” including Kyiv.

Russia said it intercepted 174 Ukrainian drones and three missiles over the Black Sea.

—

Israel/Gaza: Two Israeli attacks over three days near an aid distribution point run by the Gaza Humanitarian Foundation killed over 60 people in Rafah, the Palestinian news agency reported, hundreds injured.

In the first instance the Israeli military said its forces had opened fire on a group of individuals who had left designated access routes near the distribution center in Rafah.  It said it was still investigating what had happened.

The deaths came hours after Israel said three of its soldiers had been killed in fighting in the northern Gaza Strip, as its forces pushed ahead with a months-long offensive against Hamas that had laid waste to much of the enclave.

The U.S.-backed Gaza Humanitarian Foundation opened its first distribution sites last week in an effort to alleviate widespread hunger among the war-battered population, most of whom have had to abandon their homes to flee fighting.

The foundation’s aid plan, which bypasses traditional aid groups, has come under fierce criticism from the United Nations and established charities which say it does not follow humanitarian principles.

The private group, backed by Israel, said it distributed 21 truckloads of food Tuesday.

But you’ve had two large incidents, with 27 and 31 killed, plus others killed in separate attacks.

Israel claims Hamas was stealing most of the aid that the other charity groups were distributing.

UN Secretary-General Antonio Guterres said he was “appalled” by reports of the killings of Palestinians while seeking aid and called for an independent investigation.

On the ceasefire front, U.S. envoy Steve Witkoff rejected Hamas’ proposed changes last Saturday to a ceasefire framework with Israel, calling the terror group’s alternative “totally nonsensical.”

The most recent ceasefire proposal pitched by Witkoff calls for a 60-day truce as well as the release of the 10 living Israeli hostages and the bodies of 18 deceased captives.

The deal would also prompt the release of 125 Palestinian terrorists serving life sentences in Israel and 1,111 more from Gaza who have been detained since the war broke out on Oct. 7, 2023.

Another 180 bodies of dead Palestinians in Israel would also be returned under the terms of the proposal.

Left unresolved in peace talks is whether the Israel Defense Forces will resume their ground assault in the Gaza Strip at the conclusion of the cease-fire period.

Prime Minister Netanyahu has said the IDF will “take over all areas” of Gaza, but admitted that avoiding “a situation of famine” for Palestinian civilians was essential.

Lastly, Thursday, the IDF struck several sites in Beirut’s southern suburbs that it said held underground facilities used by Hezbollah for drone production.

Iran: Supreme Leader Ayatollah Ali Khamenei said on Wednesday that abandoning uranium enrichment was “100%” against the country’s interests, rejecting a central U.S. demand in talks to resolve a decades-long dispute over Tehran’s nuclear ambitions.

The U.S. proposal for a new nuclear deal was presented to Iran on Saturday by Oman, which has mediated talks between Iranian Foreign Minister Abbas Araqchi and President Trump’s Middle East envoy, the aforementioned Mr. Witkoff.

After five rounds of talks, several hard-to-bridge issues remain, including Iran’s insistence on maintaining uranium enrichment on its soil and Tehran’s refusal to ship abroad its entire existing stockpile of highly enriched uranium – possible raw material for nuclear bombs.

Khamenei, who has the final say on all matters of state, said nothing about halting the talks, but said the U.S. proposal “contradicts our nation’s belief in self-reliance and the principle of ‘We Can.’’

“Uranium enrichment is the key to our nuclear program and the enemies have focused on the enrichment,” Khamenei said during a televised speech marking the anniversary of the death of the Islamic Republic’s founder, Ayatollah Ruhollah Khomeini.

“The proposal that the Americans have presented is 100% against our interests… The rude and arrogant leaders of America repeatedly demand that we should not have a nuclear program.  Who are you to decide whether Iran should have enrichment?” he added.

President Trump wants to curtail Tehran’s potential to produce a nuclear weapon that could trigger a regional nuclear arms race and perhaps threaten Israel.  Iran’s clerical establishment, for its part, wants to be rid of devastating sanctions.

So absolutely nothing has changed in terms of the talks and the two sides are at a stalemate.

But what has changed is the Iranian regime is grappling with multiple crises – a lousy economy, energy and water shortages, a plunging currency, huge losses among its regional proxies in conflicts with Israel, and rising fears of an Israeli strike on its nuclear sites.

Last weekend, the Vienna-based International Atomic Energy Agency issued a confidential report claiming Iran further increased its stockpile of uranium enriched to near weapons-grade levels. In a separate report, the agency called on Tehran to urgently change course and comply with its yearslong probe.

The report, seen by news agencies – says that as of May 17, Iran amassed 900.8 pounds of uranium enriched up to 60%, technical steps away from weapons-grade levels of 90%.  A report in February put this stockpile level at 605.8 pounds.

The report says Iran is now “the only non-nuclear-weapon state to produce such material” – something the agency said was of “serious concern.”

About 42 kilograms of 60% enriched uranium is theoretically enough to produce one atomic bomb if enriched further to 90%.  Forty-two kilograms is about 92 pounds.

The IAEA report also estimated that as of May 17, Iran’s overall stockpile of enriched uranium – which includes uranium enriched to lower levels – stook at 20,387.4 pounds, an increase of 2,100 pounds since February’s report.

IAEA Director-General Rafael Grossi warned that Tehran has enough uranium enriched to near-weapons-grade levels to make “several” nuclear bombs if it chose to do so.

U.S. intelligence agencies assess that Iran has yet to begin a weapons program, but has “undertaken activities that better position it to produce a nuclear device, if it chooses to do so.”

Iran’s Foreign Ministry and the Atomic Energy Organization of Iran said in a joint statement that the IAEA report was based on “unreliable and differing information sources” and accused it of being biased, unprofessional and lacking crucial, updated information.

The statement reiterated that Ali Khamenei issued a religious decree that nuclear weapons would not be part of the country’s defense arsenal.  However, Iran stressed that under international law, the country has a right to a peaceful nuclear program, including uranium enrichment. The statement said the uranium enrichment was under “transparent” monitoring by the IAEA, which the IAEA denies.

In Saturday’s comprehensive report, the IAEA said the “lack of answers and clarifications provided by Iran” to questions the watchdog had regarding three suspected nuclear sites “has led the agency to conclude that these three locations, and other possible related locations, were part of an undeclared structured nuclear program carried out by Iran until the early 2000s and that some activities used undeclared nuclear material.”

China: U.S. Secretary of Defense Pete Hegseth warned of China posing an “imminent” threat to Taiwan, while urging Asian countries to boost defense spending and work with the U.S. to deter war.

Hegseth also said that while the U.S. does not “seek to dominate or strangle China,” the U.S. would not be pushed out of Asia and would not allow intimidation of allies.

Hegseth was addressing top Asian military officials at the Shangri-la Dialogue, a high-level defense summit held annually in Singapore.

Many in Asia fear potential instability if China invades Taiwan, with China not ruling out the use of force.

In his speech, Hegseth characterized China as seeking to become a “hegemonic power” that “hopes to dominate and control too many parts” of Asia.

He said that Beijing was “credibly preparing to potentially use military force to alter the balance of power” in Asia, and referred to a 2027 deadline that President Xi Jinping has allegedly given for China’s military to be capable to invade Taiwan.

China “is building the military needed to do it, training for it, every day and rehearsing for the real deal,” Hegseth said.

“Let me be clear; any attempt by Communist China to conquer Taiwan by force would result in devastating consequences for the Indo-Pacific and the world.  There’s no reason to sugarcoat it. The threat China poses is real. And it could be imminent. We hope not but certainly could be.”

But this year, while the U.S. sent one of its largest delegations ever to the Dialogue, China instead sent a notably low-level delegation and scrapped a planned speech on Sunday.  No explanation given, as others tried to figure out what it meant.

There was thus no dialogue as there traditionally is between U.S. and Chinese military leaders at this conference.

China did protest Hegseth’s “vilifying” remarks, the ministry for foreign affairs said on Sunday.

“Hegseth deliberately ignored the call for peace and development by countries in the region, and instead touted the Cold War mentality for bloc confrontation, vilified China with defamatory allegations, and falsely called China a ‘threat,’” the ministry said on its website.

“The United States has deployed offensive weaponry in the South China Sea and kept stoking flames and creating tensions in the Asia-Pacific, which are turning the region into a powder keg,” the ministry said.

Meanwhile, Chinese Foreign Minister Wang Yi used his first meeting with new U.S. Ambassador David Perdue to complain about recent actions by Washington, underscoring a downturn in relations between the world’s two biggest economies.

“Unfortunately, the U.S. has recently introduced a series of negative measures on unfounded grounds, undermining China’s legitimate rights and interests,” Wang said during the sitdown in Beijing, according to a Chinese government statement.

He called on the U.S. to “create the necessary conditions for China-U.S. relations to return to the right track.”

Perdue said in a post on X that he raised the Trump administration’s “priorities on trade, fentanyl and illegal immigration,” and that communication was “vital” to the two sides’ ties.

And this story.  A Chinese scientist entered the U.S. last year with a toxic fungus stashed in his backpack, federal authorities said Tuesday as they filed charges against him and a girlfriend who worked in a lab at the University of Michigan.

The pathogen is known as Fusarium graminearum, which can attack wheat, barley, maize and rice and sicken livestock and people, the FBI said in a court filing in Detroit.

The FBI said a scientific journal describes it as a “potential agroterrorism weapon.”

The two were charged with conspiracy, smuggling, making false statements and visa fraud.

“The alleged actions of these Chinese nationals, including a loyal member of the Chinese Communist Party, are of the gravest national security concerns,” U.S. Attorney Jerome Gorgon Jr. said.

The girlfriend appeared in court and was returned to jail awaiting a bond hearing, but she’s a flight risk.

The other suspect, Zunyong Liu, 34 was turned away at the Detroit airport and sent back to China in July 2024, after changing his story during an interrogation about red plant material discovered in his backpack, the FBI said.

North Korea: Kim Jong Un told a visiting top Russian official that his country will “unconditionally support” Russia’s war against Ukraine, the North’s state media reported Thursday, the latest sign of expanding cooperation between the two nations.

In April, the two countries officially confirmed North Korean troops’ deployment to Russia for the first time, saying that soldiers of the two countries were fighting alongside each other to repel a Ukrainian incursion into Russia’s Kursk border region.

In a meeting with Russian Security Council Secretary Sergei Shoigu in Pyongyang on Wednesday, Kim affirmed that North Korea will “unconditionally support the stand of Russia and its foreign policies in all the crucial international political issues including the Ukrainian issue,” the official Korean Central News Agency said.

In return for his support of Russia, Kim’s reward is a rapidly modernizing military that threatens the delicate balance of power on the Korean Peninsula.

As the New York Times reported: “Attack drones directed by artificial intelligence. Tanks with improved electronic warfare systems.  A newly built naval destroyer fitted with supersonic cruise missiles.  A new air-defense system. Air-to-air missiles.

“The list of new weapons being touted by North Korea grows almost by the week.”

South Korea: Lee Jae-myung of the center-left Democratic Party won the South Korean presidential election on Wednesday, riding a wave of anger against former President Yoon Suk Yeol and his People Power Party after months of political turmoil.

Mr. Lee’s opponent, Kim Moon-soo of the PPP conceded, Lee defeating him 48.8% to 42%.

But the country’s new leader faces daunting challenges.  There is no two-month transition period usually afforded to new leaders, for him to assemble his cabinet and nail down their vision for the country.  Instead, Lee takes over on Day One because of Yoon’s ouster.  And he has to find a way to fix South Korea’s sputtering economy and negotiate with President Trump’s tariffs.  He also has to navigate between his main ally, the United States, and their biggest trading partner, China.

South Korea is being hit hard with aggressive tariffs on its core industries – steel and cars.  They had assumed that being longstanding military allies from the days of the Korean War, and having a trade agreement with the U.S., would spare them.

At least his Democratic Party controls the National Assembly.

Turnout passed 79 percent, highest since 1997.

Poland: Nationalist opposition candidate Karol Nawrocki narrowly won Poland’s presidential election last weekend, 50.9% to 49.1% for Rafal Trzaskowski, the liberal Warsaw mayor who was standing for Prime Minister Donald Tusk’s ruling Civic Coalition.  Both candidates had declared victory immediately after the publication of an exit poll late on Sunday that showed the result would be very close.  But the official results Monday had Nawrocki the winner.

This is a major blow to Tusk and the centrist government’s efforts to cement Warsaw’s pro-European orientation.  It is a big victory for European conservatives inspired by President Donald Trump.  Nawrocki, 42, can now use his presidential veto to thwart the prime minister’s policy agenda.

Tusk’s government has been seeking to reverse judicial reforms made by the previous nationalist Law and Justice 9PiS government, but current President Andrzej Duda, a PiS ally, has blocked its efforts – a pattern Nawrocki will no doubt continue.

Sunday’s run-off vote came just two weeks after Romania’s centrist Bucharest mayor, Nicusor Dan, had dealt a blow to hard-right and nationalist forces in central Europe by winning that country’s presidential contest.  Hungarian Prime Minister Viktor Orban hailed a “fantastic victory” for Nawrocki.

Random Musings

–Presidential approval ratings….

Gallup: 43% approve of President Trump’s job performance, while 53% disapprove.  33% of independents approve (May 1-18).

Rasmussen: 50% approve, 49% disapprove (June 6).

A YouGov/Economist poll has Trump with a 45% approval rating, 49% disapproval (May 30-June 2).

—Democrats are scrambling madly over their lack of power and influence, and their failure to win last fall’s election.

“Elections will happen. And we will see,” former president Bill Clinton told “CBS Sunday Morning.”  If Democrats win governors’ races and capture the House majority in 2026, opposition to Trump will grow, he added.  “Look, only elections are going to change this.”

“President Trump has a right to do what he thinks is right; and he’s doing it,” Clinton continued.  “The courts are doing their jobs. There will be other elections. But someone needs to stand up and say, ‘Damn it, what we have in common matters more.  We cannot throw the legacy of this country away. We cannot destroy other people’s trust in us.  We need to preserve that and find a way to work together, and not humiliate other people just so we can win.’  We got to just calm down and try to pull people together again.  That’s what I think.”

One Democrat who is trying to gain traction for a potential run in 2028 is Maryland Gov. Wes Moore, the only Black governor.  At an appearance in South Carolina, a leadoff primary state, Moore urged Democrats to act with “speed” to try to improve American’s lives, even under GOP control in the White House and Congress.

“Gone are the days when we are the party of bureaucracy, multiyear studies, panels. And college debate club rules,” the governor said last weekend.  “We must be the party of action.  Because right now, the people of this country are calling on us to act.”

But here are some figures, as pointed out in a new CNN Poll released over the weekend.

Most Americans, 58%, now say that the government should do more to solve the country’s problems – a record high in more than 30 years of CNN polling.

While neither party is viewed as especially strong or effective, skepticism weighs particularly heavily on the Democratic Party.  Americans are far more likely to see Republicans than Democrats as the party with strong leaders: 40% say this descriptor applies more to the GOP, with just 16% saying it applies to the Democrats.  They’re also more likely to call Republicans the party that can get things done by 36% to 19%, and the party of change, by 32% to 25%.

True independents, those who don’t lean toward either party, are particularly grim in their views of the parties on these issues; 76% say neither party has strong leaders or can get things done, and 72% that they view neither as the party of change.

Beyond American’s shifting views of government, the survey also finds ebbing belief in the achievability of the American Dream.  A 54% majority says that most people who want to get ahead can make it if they’re willing to work hard, down from 67% in 2016, and lower than other polling on the same question dating back to the 1990s.

Nearly half, 45%, say they don’t view hard work and determination as any guarantee of success for most people.  That rises to a 52% majority of Black Americans and 53% among those younger than 30.

—Mohamed Sabry Soliman, the suspect in the Boulder flamethrower attack, was in the U.S. on an expired B2 visa since February 2023.  But he had filed an asylum claim.  He had worked as an Uber driver since 2023, the family having settled in Colorado Springs in 2022, filing the asylum claim that September.

The attack on Sunday, which unfolded in the city’s busy downtown area, injured 12 people, two being flown by helicopter to a burn unit in Denver.  He was heard shouting “Free Palestine” as he used a makeshift flamethrower and threw Molotov cocktails on a group advocating for the release of hostages being held by Hamas, the authorities said.

The group, Run for Their Lives, that aims to bring attention to the hostages taken by Hamas, was holding its weekly, peaceful event at the Pearl Street Mall when the attack occurred.

He was then charged with a federal hate crime and Colorado state charges of attempted murder.  Soliman told investigators that he had spent a year planning the attack against the Jewish group that organized Sunday’s march and aimed to “kill all Zionist people,” according to court records.  He also said he had waited until his daughter graduated from high school to carry out the attack, an arrest affidavit states.

The family of Soliman was taken into custody Tuesday, with Homeland Security Secretary Kristi Noem saying on social media that his wife and five children were rounded up by ICE two days after the attack.

“We are investigating to what extent his family knew about this heinous attack, if they had knowledge of it, or if they provided support to it,” Noem said on X.

The White House wrote the family had been placed in expedited removal and added: “THEY COULD BE DEPORTED AS EARLY AS TONIGHT.”

President Trump has cut federal funding for universities, arguing that they are bastions of antisemitism, and the administration has stripped the visas of people who have participated in pro-Palestinian demonstrations, Trump pointing to this as evidence he has made countering antisemitism a priority like no president ever has before.  But in the following post on Monday afternoon, condemning Sunday’s attack, there is no mention of Jews or antisemitism.

Trump on Truth Social:

“Yesterday’s horrific attack in Boulder, Colorado, WILL NOT BE TOLERATED in the United States of America.  He came in through Biden’s ridiculous Open Border Policy, which has hurt our Country so badly. He must go out under ‘TRUMP’ Policy.  Acts of Terrorism will be prosecuted to the fullest extent of the Law.  This is yet another example of why we must keep our Borders SECURE, and deport illegal, Anti-American Radicals from our Homeland.  My heart goes out to the victims of this terrible tragedy, and the Great People of Boulder, Colorado!”

–Subscriptions for the coming season at the Kennedy Center for the Performing Arts are down by about $1.6 million, or 36%, compared with last year, as reported by the Washington Post.

President Trump took control of the Kennedy Center in February, filling the board of trustees with allies who then appointed him chair.

—A massive cloud of dust from the Sahara Desert blanketed most of the Caribbean on Monday in the biggest event of its kind this year as it heads toward the United States.

The cloud extended some 2,000 miles (3,200 kilometers) from Jamaica to well past Barbados in the eastern Caribbean down south to Trinidad and Tobago.

The hazy skies unleashed sneezes, coughs and watery eyes across the Caribbean, with some donning masks or avoiding the outdoors.

The plume was expected to hit Florida, Louisiana, Alabama and Mississippi later in the week and over the weekend.

But usually the plumes lose most of their concentration in the eastern Caribbean.

–The concerns over this year’s hurricane season are warranted, owing to massive cuts to the federal system that forecasts, tracks and responds to hurricanes.

Experts are alarmed over the large-scale staff reductions, travel and training restrictions and grant cut-offs since President Trump took office at both FEMA, and the National Oceanic and Atmospheric Administration, which tracks and forecasts hurricanes.

Both NOAA and FEMA say the agencies are prepared.

—From the Associated Press:

“Strauss’ ‘Blue Danube’ waltz has finally made it into space, nearly a half-century after missing a ride on NASA’s twin Voyager spacecraft.

The European Space Agency’s big radio antenna in Spain beamed the waltz into the cosmos Saturday.  Operators aimed the dish at Voyager 1, the world’s most distant spacecraft more than 15 billion miles away.  Traveling at the speed of light, the music was expected to overtake Voyager 1 within 23 hours.

The Vienna Symphony Orchestra performed the ‘Blue Danube’ during the space transmission, which actually sent up a version from rehearsal. It’s part of the yearlong celebration marking the 200th birthday of Johann Strauss II, who was born in Vienna in 1825.  The Strauss space sendoff also honors the 50th anniversary of ESA’s founding.

“Launched in 1977 and now in interstellar space, each of the two Voyagers carries a Golden Record full of music but nothing from the waltz king.  His ‘Blue Danube’ holds special meaning for space fans: It’s featured in Stanley Kubrick’s 1968 sci-fi film ‘2001: A Space Odyssey.’”

—

Pray for the men and women of our armed forces…and all the fallen.

We remember those who gave their lives June 6, 1944…D-Day….watch “Saving Private Ryan”….

Slava Ukraini.

God bless America.

—

Gold $3338…Silver hit its highest levels since Feb. 2012, over $36….
Oil $64.75…up $4

Bitcoin $104,342 [4:00 PM ET, Friday]

Regular Gas: $3.14; Diesel: $3.51 [$3.48 – $3.83]

Returns for the week 6/2-6/6

Dow Jones  +1.2%  [42762]
S&P 500  +1.5%  [6000]
S&P MidCap  +1.7%
Russell 2000  +3.2%
Nasdaq  +2.2%  [19529]

Returns for the period 1/1/25-6/6/25

Dow Jones  +0.5%
S&P 500  +2.0%
S&P MidCap  -2.2%
Russell 2000  -4.4%
Nasdaq  +1.1%

Bulls 37.7
Bears 26.4….41.5 / 26.4 last week

Hang in there.  For horse racing fans, the Belmont Stakes could be electric.

Brian Trumbore