For the week 5/19-5/23

[Posted 4:30 PM ET, Friday]

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Edition 1,361

As we head into the holiday weekend, President Trump is increasingly bored with the Russia-Ukraine war, and the man who said repeatedly on the campaign trail that he could settle it in “24 hours” is clearly abandoning Ukraine.  There is a ton of uncertainty when it comes to continuing to supply Kyiv with weapons, or even sharing intelligence, though on the former a lot of it is still in the pipeline from previously approved arms packages.  Otherwise, it’s all up to Europe.

Trade tensions remain, too, and not one deal has been signed.  Just a few commitments, such as the proposed trade deal with the UK.  There is no deal with China, and a second round of talks with Beijing has yet to be held, though China seems somewhat eager to do so.  I get into Trump’s latest Truth Social threats on the trade topic down below.

But the president did get his “One Big, Beautiful Bill” through the House, which roiled the bond market, both because it will lead to potentially massive new amounts of debt, but also it does offer the prospect of renewed growth due to the tax cuts and other growth proposals inside the legislation.  I say ‘proposals’ because it’s now up to the Senate to weigh in and add or delete, depending on its own priorities.  Proposed Medicaid cuts are a huge issue.

Meanwhile, personally, I spend a ton of money on ink cartridges and I went to Staples last Sunday to get a new one that normally costs $62.99 and it was $69.99.  ‘What the heck,’ I mused.  That’s 11% more!

Well, guess where it is made?  Japan.  And we have a 10% tariff on everything from the place right now (25% on autos, auto parts, steel and aluminum), with reciprocal tariffs of 24% on the plate for July unless a deal can be worked out between Tokyo and Washington.  It took a while for the price increase from HP to work its way through and here we are.  That’s how this stuff works, boys and girls.  As Charlie Brown would say, “Drat!”

But this just in….President Trump, at 3:25 p.m. Eastern posted on Truth Social that he has approved a “planned partnership between United States Steel and Nippon Steel, which will create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy.”

I will report on all the details next week, but this is what I wanted all along, a deal between Nippon and U.S. Steel to go through, and both Presidents Biden and Trump had been stupidly blocking it.  Just the other week I told you what a failure Cleveland-Cliffs had been, that company preferred by Trump to take over U.S. Steel, solely because the CEO was a Trump backer.  Instead, Cleveland-Cliffs has been shutting plants all over the place.

So great for Pittsburgh, a truly great city, and, yes, good for America!

—

Trump World, cont’d….

—Treasury Secretary Scott Bessent acknowledged Sunday that Walmart, the largest U.S. retailer, may pass along some of the costs from President Trump’s tariffs to its shoppers through higher prices.

Bessent described his call with the company’s CEO a day after President Trump warned Walmart to avoid raising prices from the tariffs at all and vowed to keep a close watch on what it does.

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain.  Walmart made BILLIONS OF DOLLARS last year, far more than expected.  Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING,” Trump posted on Truth Social.  “I’ll be watching, and so will your customers!!!”

Walmart executives said last week as part of their earnings call that higher prices began to appear on their shelves in late April and accelerated this month.

“We’re wired to keep prices low, but there’s a limit to what we can bear, or any retailer for that matter,” Chief Financial Officer John David Rainey told the press.

With doubts persisting about Trump’s economic leadership, Bessent pushed back against inflation concerns, praised the uncertainty caused by Trump as a negotiating tactic for trade talks and dismissed the downgrade Friday of U.S. government debt by Moody’s Ratings (covered below).

Bessent said he spoke Saturday with Walmart CEO Doug McMillon, stressing on two Sunday news shows that what he thought really mattered for Walmart customers was the decline in gasoline prices, Bessent saying “gasoline prices have collapsed” since the Inauguration which is just a flat-out lie! [Regular gas nationwide today is $3.19 a gallon vs. $3.11 on Inauguration Day, though it is down from last year’s $3.61.]

“Walmart will be absorbing some of the tariffs, some may get passed on to consumers,” Bessent said on CNN.  “Overall, I would expect inflation to remain in line.  But I don’t blame consumers for being skittish after what happened to them for years under Biden,” referring to inflation hitting a four-decade high in June 2022 as the recovery from the pandemic, government spending and the Russian invasion of Ukraine pushed up costs.

Walmart did not immediately comment on Bessent’s description of the conversation with McMillon.

But then on Tuesday, the company said in a statement to USA TODAY:

“We have always worked to keep our prices as low as possible and we won’t stop,” spokesperson Joe Pennington said.  “We’ll keep prices as low as we can for as long as we can given the reality of small retail margins.”

On tariffs, the Trump administration is still trying to determine rates with roughly 40 major trading partners before a July deadline.  It’s also in the early stages of a 90-day negotiation with China, after it agreed to reset tariffs on that country from 145% to 30% so that talks can proceed.

And markets weren’t pleased to hear Secretary Bessent say on Monday that there may be more bad tariff news coming.  He said the April 2 “reciprocal” tariffs could return for some countries if they don’t agree to President Trump’s supposedly generous terms.

To wit…the U.S. has been pressuring the EU to cut tariffs on American goods, as per a report in the Financial Times Friday.  Talks have stalled, with Washington warning of more duties if Brussels doesn’t make concessions.

The EU presented a fresh trade proposal to the U.S. on Thursday.  The offer includes phased tariff cuts on non-sensitive goods, plus cooperation in energy, AI, and digital infrastructure.  The EU is readying some $108 billion in retaliatory tariffs if talks fail.

To sweeten the deal, EU officials are also willing to extend a 2020 tariff-free arrangement on U.S. lobster imports, as reported by the FT.

But Friday morning, President Trump lobbed this Truth Social post over the transom:

“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with. Their powerful Trade Barriers, Vat Taxes, Ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against American Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable.  Our discussions with them are going nowhere!  Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States. Thank you for your attention to this matter!”

[Trump also told the UK to “stop with the costly and unsightly windmills, and incentivize modernized drilling in the North Sea” to bring energy costs “WAY DOWN, and fast!”]

The post from Trump followed another just minutes earlier:

“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else.  If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.  Thank you for your attention to this matter!”

Both Apple shares and the market overall fell hard prior to the open, but over the course of the days, the markets recovered some.

I also can’t help but add the following:

Sen. Rand Paul (R-Ky.) had this to say about tariffs and trade, and President Trump constantly harping that the United States is getting ripped off, in an interview with ABC’s “This Week” last Sunday.

“Tariffs are taxes, and when you put a tax on a business, it’s always passed through as a cost. So, there will be higher prices. [Ed. see my ink cartridge.]

“And I think this is what’s important to know.  People talk about, oh, this is America versus China. The U.S. doesn’t trade with China.  You trade with Walmart, or you trade with Target, or you trade with Amazon. Americans go in and buy a product.

“Now, it might come from China, but think about it this way – think of the entire trade with China was all TVs. A million people go to Walmart. They all buy a TV.  They like the quality. They like the price, and it happened to come from China.

“But then you draw a circle around China and the U.S., and you say, oh, my goodness, it’s a trade deficit.  We buy all of our TVs from over there.  But each individual transaction – each individual who bought a TV was happy.  But how can you draw a circle around a million happy people and say they all got ripped off?

“So, there is an economic fallacy here, and the fallacy is that trade deficits actually mean anything. They’re artificial accounting.”

And on Trump’s talk of a massive ‘trade deficit’ with Canada, and that the United States is “subsidizing” Canada, Paul said:

“No, they’re really not related at all.  What happens if we trade with another country because they have less expensive goods is we become richer.  You also have more money that you can spend.

“So, let’s say you’re an average American and you shop at Walmart, you save about $4,000 or $5,000 a year because you’re able to purchase goods that are imported from other countries.

“What do you do with that? I don’t’ know, maybe you go to Disneyworld, maybe you go to Dollywood.  You know – you can spend a lot of it in America, maybe you get somebody to cut your grass.  There’s all kinds of things that happen to that extra money, but you are richer because you’ve gotten a product at a lower cost.

“And this is what the marketplace does. It drives down prices and it pushes efficiency, but it isn’t one country against another.  All of that is an artificial accounting.

“We’ve had a trade deficit with China ever since 1976, and yet we got richer and they got richer.”

—President Trump says his lofty “Golden Dome” missile-defense project will cost $175 billion and be ready in just three years, but experts said those cost and schedule projections were likely far too low.

The project will involve “next-generation technologies across the land, sea, and space, including space-based sensors and interceptors,” Trump said Tuesday in remarks from the White House.  The latest known concept for Golden Dome combines various existing systems – ground-based missile Patriot and THAAD interceptors, ship-fired Standard Missiles – as well as an extensive constellation of satellites bearing sensors and new space-based weapons, as reported by Defense One.

Tom Karako of the Center for Strategic and International Studies said it will take 10 years to put the system together.

Today, America’s ballistic missile defense system is largely concentrated in Alaska, and it has never achieved 100% success in tests.  Plus, today’s hypersonic weaponry makes it even more difficult to protect the airspace.

—The Pentagon accepted Qatar’s $400 million airliner donation for Air Force One.  The Air Force said it was preparing to award a contract to modify the jet so it can serve as Air Force One.  The Wall Street Journal previously reported that L3 Harris, a defense contractor, will retrofit the aircraft.

Pentagon spokesman Sean Parnell said: “The Department of Defense will work to ensure proper security measures and functional-mission requirements are considered for an aircraft used to transport the President of the United States.”

White House officials say they hope the luxuriously outfitted Boeing 747-8 jet will be ready to serve as Air Force One as soon as the end of the year.

But that seems like an impossible timetable to meet unless Trump is willing to forgo many of the features that make Air Force One distinctive.

Trump defended the decision to accept the plane in comments Wednesday in the Oval Office, calling the gift “a very nice thing.”  Two replacement planes Boeing has been working on are years behind schedule, he noted.

—

Wall Street and the Economy

After the market close last Friday, and after I had posted, the U.S. was downgraded by Moody’s Ratings thanks to government debt that’s approaching $37 trillion.  It was a dramatic move that cast further doubt on the nation’s status as the world’s highest-quality sovereign borrower.  Moody’s lowered the U.S. credit score to Aa1 from Aaa, joining Fitch Ratings (2023) and S&P Global Ratings (2011) in grading the world’s biggest economy below the top, triple-A position.

The federal budget deficit is running near $2 trillion a year, or more than 6% of GDP, and congressional Republicans are pushing through budget legislation that could add trillions of dollars more.

“While we recognize the U.S.’ significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics,” Moody’s wrote in a statement.

“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” the report said.  “We do not believe that material multiyear reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

And: “Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat.  In turn, persistent, large fiscal deficits will drive the government’s debt and interest burden higher.  The U.S.’ fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns.”

Treasury yields jumped on the news, with the 10-year rising to 4.61% by Thursday morning, from 4.43% at Friday’s close, before backing off some.

Republicans are still not expected to cover anywhere near the $3.8 trillion cost of the tax cuts they have prepared.  The administration’s blitz to fire much of the federal work force, i.e., DOGE, and unilaterally withhold spending, also has not generated significant savings.

Treasury Secretary Bessent maintained that deficits would not be a problem because the economy would grow faster than the debt accumulation, reducing its increase as a size of the overall economy, which is total B.S.  It’s a tune we heard in Trump I.  Bessent also called the Moody’s downgrade “a lagging indicator,” and blamed federal spending during the Biden administration for what Moody’s cited in its reasoning.

So late Sunday, the House Budget Committee passed a massive tax and immigration package central to President Donald Trump’s agenda, overcoming opposition from hard-line conservatives over spending.

Four fiscal conservatives – all deficit hawks aligned with the House Freedom Caucus – changed their vote to “present,” allowing the legislative package to be recommended “favorably” to the House, 17-16.  But their hesitance to vote the One Big Beautiful Act out of committee is a reminder that the far-right flank of the Republican conference remains skeptical.

Speaker Mike Johnson acknowledged that there’s “a lot more work to do.”

GOP leaders can only lose two votes on the House floor if all lawmakers are present and voting.

The massive package forms the centerpiece of Trump’s second-term agenda. In addition to extending Trump’s 2017 tax cuts, which are set to expire in December, the bill would make good on Trump’s campaign promises to end taxes on tips, overtime wages and auto-loan interest while directing hundreds of billions of dollars in spending to immigration enforcement, defense and other White House priorities.

But the new spending and lost tax revenue would increase the debt by at least $2.5 trillion (and as high as $3.8 trillion by some estimates) over the next decade – an amount the hard-line conservatives find impossible to stomach.  Among the holdouts’ key demands: deeper spending cuts, particularly to Medicaid – the federal health insurance program for the poor.

And six lawmakers are pushing for a higher cap on deductions for state and local taxes (SALT) in New York and other blue states. Trump’s 2017 tax law capped the deduction at $10,000 a year.  To appease that group, GOP leaders have proposed raising the cap to $30,000 – an expensive proposal that the group of six argues is still insufficient.

Trump then went to Capitol Hill on Tuesday to apply pressure on Republicans, seeking to push them to vote for the legislative package.  Trump urged moderate Republicans from blue states to give up their fight over the SALT cap, while warning members not to “f— with Medicaid.”

But even if the budget gets through the House, it has to pass the Senate.  Sen. Ron Johnson (R-Wis.) said the spending cuts in the House bill are “fake.”

We then advance to Wednesday, with Trump hosting GOP leaders and the holdouts for a lengthy session at the White House.

The House Rules Committee then voted to advance the bill, a required step. And the House then passed the tax-and-spending bill early Thursday, at dawn, after party leaders made a series of last-minute changes that united their warring factions, such as hiking the SALT deduction to $40,000 for incomes up to $500,000.

The vote was 215-214, with one lawmaker voting present.  Reps. Warren Davidson of Ohio and Thomas Massie of Kentucky were the only Republicans to vote against the measure, and Rep. Andy Harris (R-Md.) voted present.  All Democrats opposed the bill.

“To put it simply this bill gets Americans back to winning again,” said Speaker Johnson just before the vote.

Republicans insisted their sprawling 1,000-page-plus package was what voters sent them to Congress – and Trump to the White House – to accomplish. They believe it will be “rocket fuel,” as one put it during the debate, for the uneasy U.S. economy.

Central to the package is the GOP’s commitment to extending some $4.5 trillion in tax breaks they engineered during Trump’s first term, while adding the new ones noted above.

To make up for some of the lost tax revenue, Republicans focused on changes to Medicaid and the food stamps program, accelerating the implementation date, while imposing work requirements on many of those receiving benefits.  There’s also a massive rollback of green energy tax breaks from the Biden-era Inflation Reduction Act, implementation of the phaseout of certain tax credits also accelerated.

Additionally, the package tacks on $350 billion in new spending, with about $150 billion going to the Pentagon, including for the above-noted “Golden Dome” defense shield, and the rest for Trump’s mass deportation and border security agenda.

Agree or disagree with the content, Speaker Johnson did a great job of getting the package across the line.

Democrats criticized the bill as taking money from the social security safety net to fund tax cuts for the wealthy.

We now head to the Senate, where Republicans have a 53-47 majority.  They will use the process known as budget reconciliation that lets them bypass the Senate’s 60-vote filibuster threshold but comes with the restriction that the bill must be focused on fiscal matters.

Republicans are aiming to get the bill to the president’s desk by July 4, but it’s likely the real deadline is later. The bill includes an increase in the debt limit, which Congress must act on by August when the U.S. is projected to run out of cash and borrowing capacity to pay its bills.

—

Meanwhile, JPMorgan Chase CEO Jamie Dimon warned that he sees an “extraordinary amount of complacency” in markets after investors clawed back their “Liberation Day” losses, emphasizing that the risks of higher inflation and even stagflation are still higher than people think

Dimon also argued that the full effect of the tariffs from the Trump administration is not yet apparent, and that even at their current levels, the duties are “pretty extreme.”

Three Federal Reserve Bank presidents this week, San Francisco’s Mary Daly, Cleveland’s Beth Hammack and Atlanta’s Raphael Bostic, in various forums, each described a cautious approach shaped by uncertainty, not urgency.

“We’re in center position,” Daly said.  “My reaction function is to stay in center position and be prepared to move agilely, but not abruptly or quickly when we don’t need to, because we don’t have enough information to really bring those confidence bands in.”

“I am a person of action,” Hammack said.  “But right now, I think the best action we can take is to sit on our hands.”  Bostic was more definitive.  “I don’t have a recession in my outlook,” he said. Bostic added that it will take around six months to assess how tariffs affect the broader economy and the outlook for inflation.

The three presidents all emphasized the limits of backward-looking data and the growing importance of anecdotal intelligence.

Jamie Dimon, speaking at the lender’s Global China Summit in Shanghai, said the Fed is doing the right thing to wait and see before they decide on monetary policy.

“I don’t think the American government wants to leave China,” Dimon said.  “I hope they have a second round, third round or fourth round (of talks) and hopefully it will end up in a good place.”

On the economic data front, April existing-home sales fell 0.5% over March to a 4.00 million annual rate, and were down 2.0% from one year ago.  The median existing-home sales price rose 1.8% from April 2024 to $414,000, an all-time high for the month of April.

But then April new home sales were far better than expected, 743,000 vs. a revised figure of 670,000 for March.  It was the best pace since February 2022.

The Atlanta Fed’s GDPNow barometer for second-quarter growth is at 2.4%.

Freddie Mac’s 30-year fixed-rate mortgage is 6.86%.

Next week we get the Fed’s preferred inflation barometer, the PCE (personal consumption expenditures index) on Friday, as well as a second look at first-quarter GDP.

Europe and Asia

We had flash PMI readings for May in the eurozone, courtesy of S&P Global and Hamburg Commercial Bank, and the composite reading was 49.5 (50 the dividing line between growth and contraction), a 6-month low.  Manufacturing was 51.5, services 48.9, a 16-month low.

Germany: manufacturing 51.5, services 47.2, 30-month low.
France: mfg. 51.2, 37-mo. high, services 47.4.

UK: mfg. 44.8, 19-mo. low, services 50.2.

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank:

“The eurozone economy just cannot seem to find its footing. Since January, the overall PMI has shown only the slightest hint of growth and in May, the private sector actually slipped into contraction. Do not blame U.S. tariffs for this one. In fact, efforts to get ahead of those tariffs might partly explain why manufacturing has held up a bit better lately.  Manufacturers have now increased production for the third straight month, and for the first time since April 2022, new orders did not decline.  On the flip side, service providers, who are generally less exposed to U.S. trade policy, except in areas like international logistics, are seeing business activity shrink for the first time since November 2024…it is the sluggish domestic demand that seems to be dragging the sector down.

“May’s snapshot is not pretty.  Looking ahead, companies are only cautiously optimistic.”

The German economy grew significantly more in the first quarter than previously estimated due to export and industry frontloading ahead of U.S. tariffs, according to a second estimate published Friday.

The economy grew by 0.4% in Q1 over Q4 2024, the statistics office said, revising a preliminary reading of 0.2%.

Germany had contracted 0.2% in the final quarter of last year, reigniting recession fears.

Eurostat reported on inflation in the euro area for April was 2.4%, down from 2.5% in March.  On core, ex-food and energy, the figure was 2.7%, up from 2.5% the month prior.  So a bit of a mixed picture.

Headline inflation….

Germany 2.2%, Fance 0.9%, Italy 2.0%, Spain 2.2%, Netherlands 4.1%, Ireland 2.0%

UK inflation jumped higher than expected to 3.5% after dramatic increases in water bills, energy costs and council tax.

The Bank of England is likely to rebuff calls for faster and deeper interest rate cuts after the growth in prices proved to be stronger than financial markets expected.

—Britain and the European Union on Monday struck a landmark deal to remove some post-Brexit trade barriers and to bolster cooperation on security and defense as they reduce their reliance on an unpredictable United States.

The agreement was unveiled by Prime Minister Keir Starmer of Britain and Ursula von der Leyen, president of the European Commission, in London, though some details still need to be worked out.

The agreement is designed to help the two sides work more closely together after the Trump administration signaled it was reducing its commitment to European defense and imposed global tariffs.

But Starmer’s opponents are not happy and while opinion polls suggest most Britons now believe that leaving the European Union was a mistake, the idea of rapprochement remains anathema to a vocal minority of pro-Brexit lawmakers and voters.

Under the agreement some border checks on animal and plant products will end, making trade easier, and travel between Brits and the EU will become a bit easier.

But the most important part of the deal is a security partnership that will bolster defense cooperation between the partners.  It will allow them to better pool resources and share technology and intelligence at a moment when a more aggressive Russia – and a more reluctant United States – is front of mind, leaving Europe scrambling to better defend itself.  British companies can also now participate in the EU’s new 150-billion-euro loan program for defense procurement.

Turning to Asia…China’s National Bureau of Statistics released some important data for April, with industrial production up 6.1% year-over-year vs. 7.7% prior, but better than expected.  Retail sales, 5.1% Y/Y were weaker than forecast, year-to-date fixed asset investments rose 4%.  The April unemployment rate was down a tick to 5.1%.

Overall, the economy showed signs of slowing as the trade war took its toll.  NBS spokesperson Fu Linghui said the general trend was positive but he pointed to “external shocks” that had gained intensity.

“It should also be noted that there are still many outside unstable and uncertain factors, and the foundation for the continued recovery and improvement of the national economy needs to be further consolidated,” Fu said.

Japan’s flash PMI readings for May had manufacturing at 49.0, services 50.8.

April exports rose 2% year-over-year, as expected.  April inflation was 3.6%, same as March.  Ex-food and energy, the rate was 3% vs. 2.9% the month prior.

Street Bytes

—So much for the “worst is over” trade, as Trump’s tariff posts today brought the market back to reality, this after the bond market swoon earlier led to an ugly Wednesday.

On the week, the Dow Jones finished down 2.5% to 41603, the S&P 500 lost 2.6% and Nasdaq 2.5%.

Next week, Nvidia earnings, Wednesday.

—U.S. Treasury Yields

6-mo. 4.30%  2-yr. 3.99%  10-yr. 4.51%  30-yr. 5.04%

As the yield on the 10-year was soaring much of the week, you had a bit of the ABUSA trade going on – Anywhere But U.S.A.  But then Trump issued his statements on trade today and yields at first plummeted (flight to safety), only to rise anew and finish 8 basis points higher on the 10-year for the week, the 30-year above 5.00% for the first time since Oct. 2023.

—Crude prices resumed their fall as OPEC+ was said to be discussing another super-sized production increase at its June 1 meeting, in what would be the third straight month of adding extra barrels to the market.  The cartel says the move is to satisfy demand, but one of the motives could simply be to placate Donald Trump.

This comes as markets were already concerned about oversupply, following an unexpected increase in U.S. crude stockpiles reported by the EIA (Energy Information Administration).

—Home Depot shares fell as investors hoping for a turnaround in the housing market may have to keep waiting.

The home improvement chain posted mixed earnings on Tuesday as consumers reconsider home renovation projects due to the administration’s tariffs. Revenue jumped 9.4% year-over-year to $39.86 billion, compared to the Street’s estimate of $39.29bn.  Adjusted earnings per share declined 3% to $3.56, missing the $3.59 expected.

Same-store sales fell 0.3%, a tick worse than consensus.  U.S. same-store sales growth was +0.2%, versus -0.2% expected.

In the earnings release, CEO Ted Decker said the results “were in line with our expectations” as it saw consumers engage around “smaller projects.”

CFO Richard McPhail said in an interview with the Wall Street Journal that the company plans to keep prices unchanged despite the new levies.

HD said it’s not impacted to any great extent by the tariffs on China as its goal is to have no more than 10% of its products sourced in any single country.

The company reaffirmed its full-year 2025 guidance.  HD expects sales growth of 2.8%, and same-store sales growth of 1%, with adjusted earnings declining about 2%, roughly in line with consensus estimates.

But investors hoping for a home-improvement renaissance this year could find themselves disappointed with the results and the outlook,

–Shares of Home Depot rival Lowe’s also fell some after posting first-quarter profit above estimates and reaffirming its full-year outlook.

The Mooresville, N.C.-based company reported earnings of $2.92 on net sales that fell 2% year-over-year to $20.93 billion, the latter in line with the Street’s consensus.

Comparable store sales decreased 1.7% as the retailer said “unfavorable weather earlier in the quarter was partially offset by mid-single-digit Pro and online comparable sales growth.” Analysts had projected a decline of 2.2%

Lowe’s expects 2025 sales of $83.5 to $84.5 billion, with comp sales flat to up 1%.

CEO Marvin Ellison said the company had a positive quarter “despite near-term uncertainty and housing market headwinds.”

Lowe’s sources 20% of its sales from China and has a large DIY (do it yourself) customer base, factors that will make it “more challenging to mitigate tariffs” compared to Home Depot, as one analyst put it, whereas Home Depot has a larger Pro business.

—Target slashed its annual sales forecast on Wednesday after posting a sharp decline in quarterly same-store sales, attributing the declines to weakened consumer confidence and a pullback in discretionary spending due to Trump’s trade policies.

The big-box retailer’s results showcase the pressure that American consumers are under.  Consumer sentiment has been sliding and one-year inflation expectations surged as households remained concerned about the economy.

Target’s forecast on Wednesday was in contrast to bigger rival Walmart, which maintained its annual forecast last week but said it would pass on higher prices due to tariffs, which as noted above ticked off President Trump.

Target executives, having the benefit of time since Trump’s tirade, did not say whether they would raise prices due to tariffs when asked about that on a call with reporters, stating only that it continuously adjusts pricing.

CEO Brian Cornell said current pricing decisions will largely depend on the company’s ongoing efforts to source more products in the United States and reduce reliance on China.

“That is going to play a very important role,” Cornell said.

Target has previously said that it depends on China for 30% of its goods and that it is on track to reduce it to less than 25% by the end of the year.  This is down from 60% in 2017, but still makes the current 30% tariff on China imports hard to navigate, analysts have said.  Target has noted that about 50% of its cost of goods sold are made in the U.S.

Investors so far have not shown much confidence in Target’s strategy.  Its stock has performed poorly, down nearly 28% this year, in contrast to Walmart’s 9% gain and Home Depot’s 2.3% decline.

Target is coming off a year when it struggled to deliver consistent sales growth, had issues with inventory management and more recently has faced boycotts and lawsuits related to its diversity, equity and inclusion practices.

Target then surprised analysts in saying it now expects a low-single digit decline in annual sales, when Wall Street expected a 0.3% rise.   Target previously forecast net sales growth of around 1%.

The retailer expects annual adjusted earnings between $7.00 and $9.00 per share, compared to its prior forecast of $8.80 to $9.80.

Target’s first-quarter comp sales fell 3.8%, compared to analysts’ estimates of a 1.1% decline.  On an adjusted basis, Target reported $1.30 per share when analysts on average were expecting $1.61.

—Walmart is planning to cut about 1,500 jobs as part of a restructuring push to simplify its operations, as first reported by Reuters.

The company’s plan will impact its teams in its global technology operations, e-commerce fulfillment in U.S. stores and its advertising business Walmart Connect.

But the job cuts need to be put into perspective.  WMT is the largest U.S. private employer with about 1.6 million employees (2.1 million worldwide).

—The Federal Aviation Administration on Tuesday ordered airlines to throttle back flying at Newark Liberty International Airport to help relieve congestion and reduce delays at the airport.

Under the interim order, which went into effect Tuesday, arrivals and departures will be capped at 28 each per hour while runway construction is under way.

When construction isn’t going on, the arrival and departure rate will rise to 34 per hour until late October. Daily work on the runway is scheduled to continue until June 15, and then only on Saturdays through the end of the year.

Newark already operates at a reduced flight rate because of runway construction, with expected arrivals varying from 31 to 35 flights per hour depending on the time of day.

—Ryanair reported a decline in fiscal-year earnings that was in line with analysts’ expectations, as costs rose and average fares fell.

The Irish budget airline behemoth said it achieved 1.61 billion euros ($1.8 billion) in net profit for the year to the end of March compared with 1.92 billion euros a year prior, on revenue that grew 4% to 13.95bn euros.

Earnings reflected passenger numbers that grew 9%, but 7% lower average fares.

Ryanair reiterated its 3% passenger growth expectations for fiscal 2026, and said it was seeing robust demand for summer travel and that peak fares were trending modestly ahead of where they were a year prior.  Bookings are tracking 1% ahead of last year’s pace.

On the issue of Boeing, Ryanair said it is working with the aircraft maker to accelerate deliveries and Ryanair seems more confident Boeing will do so.

—TSA checkpoint numbers vs. 2024

5/22…114 percent of 2024 levels
5/21…103
5/20…84
5/19…98
5/18…124
5/17…81
5/16…101
5/15…116

No collapse in demand yet, as feared back in March.

—AAA estimates 45.1 million Americans will be traveling at least 50 miles from home over the holiday weekend, Thursday to Monday.  That is an increase of 1.4 million travelers compared to last year and sets a new Memorial Day weekend record.  The previous record was set back in 2005 with 44 million people.

–The NJ Transit rail strike ended after three days, the two sides reaching agreement on Sunday, rail operations resuming Tuesday.

The Locomotive Engineers and Trainmen union didn’t provide specific dollar figures on its wage gains, the only issue, and riders can expect another fare increase.

—Tesla shares have rallied back sharply from their early April lows, and on Tuesday, Elon Musk told CNBC’s David Faber in an interview that Tesla is on track to launch robotaxi service in Austin, Texas, though he added that the rollout will be slow and monitored by humans remotely to start.

Musk also said he expects to be CEO in five years and that he will reduce his political spending.  Regarding the latter, Musk said “I think I’ve done enough.”  He added he might step back in at some point in the future.

Musk has vowed to spend less time in Washington, D.C., and he has some work to do at Tesla.  Tuesday’s stock gains come despite Tesla selling 11,500 cars in China this past week, according to industry data tracked by Citi analyst Jeff Chung.  That is a big improvement from the 3,040 sold the week before, but still down about 16% from the comparable week in 2024.

Tesla’s vehicles delivered figure dipped 13% in the first quarter from a year ago.  In the first seven weeks of the second quarter, Tesla sold about 48,000 vehicles in China, down 24% from the comparable time a year ago.

Back to the robotaxis, Tesla will start with 10 vehicles with a goal of expanding to Los Angeles and San Francisco.  But while the rollout will go slowly before it is scaled up, Musk told CNBC he expects hundreds of thousands of self-driving Tesla cars on the road by the end of 2026.

—Chinese electric vehicle maker BYD sold more EVs in Europe than Tesla for the first time in April.  China’s leading automaker registered 7,231 new battery-electric vehicles in the month, according to market researcher Jato Dynamics. That was up 169% from a year earlier, vaulting BYD into the top 10 brands by EV sales, with Tesla one spot back as its registrations plunged 49%.

—The Senate voted to abolish a measure that let California set its own tailpipe emissions standards and canceled its ban on new gasoline-powered car sales by 2035. While the move was favored by other car makers, it’s bad news for Tesla’s ability to profit from the sale of regulatory credits.

Senators voted 51-44 to nullify a waiver California enacted in 2022 and that 11 other states later adopted that set stricter emissions standards than the federal government.  General Motors and other auto makers argued that keeping the waiver could hamstring the industry by forcing electric vehicle sales amid declining demand.

California’s Democratic Gov. Gavin Newsom and others said California has the right to enact regulations to help improve its air quality. But the Senate used the Congressional Review Act, a law that allows legislators to overturn the actions of federal agencies.

The California regulations form the basis for Tesla’s sales of zero-emission credits.  This is a brisk business for Tesla, which sells only EVs, allowing it to far exceed targets set by regulators. Sales of those credits to fellow auto makers generated $2.9 billion over the past 12 months.

—Rooftop solar shares tumbled after the House passed President Trump’s tax-and-spending package.

Tax credits for both utility-sized and small renewable energy projects were expected to be phased out.  But the version of the bill that was approved was tougher than the clean-energy industry expected – and especially bad for rooftop solar.

Shares of SunRun, which provides solar and battery-storage systems mostly for homes, plunged about 40%.

—Bitcoin hit a new all-time high* above $111,000 late Wednesday as various legislative efforts around digital assets continued to advance, including a Senate bill to regulate stablecoins and a Texas bill to establish a Bitcoin reserve in the state, headed for the governor’s signature.

*Bitcoin’s previous record of $109,224 was reached on Inauguration Day in January.

Stablecoins are cryptos pegged to a fiat currency, typically the U.S. dollar.  The Senate legislation aims to regulate only stablecoins, not Bitcoin, but the bill’s advance toward a full floor vote nevertheless boosted overall sentiment for digital assets.

If approved in the Senate, the bill would need to be reconciled with a House version.

President Trump has vowed to be crypto-friendly, witness the Trump family’s investments in same.  And then you had the president hosting an exclusive dinner Thursday for the 220 biggest buyers of his $TRUMP memecoin, which is more than a bit controversial, many of these unnamed invitees foreigners, and the top 25 reportedly received a personal tour of the White House on Friday.

—OpenAI has been working with iPhone designer Jony Ive for two years, and now they are solidifying the tie-up with a $6.4 billion deal giving Ive and his team design and creative responsibilities at the artificial intelligence firm best-known as ChatGPT.  The deal signals OpenAI is working on consumer devices.

—Nike is set to raise prices on some trainers and clothing in the U.S. from early June, weeks after rival Adidas warned it would have to hike the cost of products due to tariffs.

Nike didn’t name tariffs explicitly as a reason for the increase, saying it regularly made “price adjustments.”  But almost all of its goods are sourced in Asia.

—The Trump administration said late on Monday that a major New York offshore wind project can move ahead, a month after the administration inexplicably stopped it.

The White House implied that it had made a side deal with New York Gov. Kathy Hochul to allow a natural gas pipeline into the state in return for the wind farm being built.  But Trump’s pipeline project remains a long shot, and Hochul’s office says she made no deal with the president to approve it.

“No deal on any natural gas pipeline was reached,” a Hochul spokesman told Barron’s.

For now, there is no clarity for either the offshore wind industry or for the companies that want to build pipelines into the Northeast.  In fact, the episode is looking more like an expensive waste of time than a shift.

The “winner” of the saga is ostensibly Equinor, the Norwegian energy company building Empire Wind, the offshore wind farm that will sit 15 miles southeast of Long Island and power about 500,000 homes in the state.  But Equinor is a loser because the project was delayed for a month, at a cost of about $50 million a week.  Equinor had already started construction and rented vessels, which racked up costly fees as they sat idly by.

–Another crisis at CBS News, as on Monday, president Wendy McMahon abruptly resigned, the latest development in the ongoing showdown between the news division and President Trump.

McMahon said in a memo “that’s it become clear the company and I do not agree on the path forward.”

Tensions between McMahon and CBS’ parent company, Paramount, have simmered for months, a period McMahon described in her memo as “challenging.”

It’s all about Paramount being in talks to settle a $20 billion lawsuit brought by President Trump that accused “60 Minutes” of deceptively editing an interview last year with his Democratic opponent, Kamala Harris.  While legal experts have called the suit baseless, Paramount’s controlling shareholder, Shari Redstone, has said she favors settling the case, which would help gain administration approval for a multibillion-dollar sale of her company to a Hollywood studio, Skydance.

This is the situation that prompted former executive producer of “60 Minutes,” Bill Owens, to resign last month, saying he no longer enjoyed his usual journalistic independence.

Foreign Affairs

Russia/Ukraine: Over the weekend, Russia launched at least 273 Shahed and decoy drones from nearly a dozen points, the Washington-based Institute for the Study of War wrote in an analysis Sunday.  [Russia fired another 112 drones overnight Sunday into Monday.]

“Russian forces are innovating their long-range drone strike tactics in order to offset the effectiveness of Ukrainian mobile defense units and overwhelm the Ukrainian air defense umbrella,” ISW observed.

A Russian drone on Saturday hit a bus evacuating civilians from a front-line area in the Sumy region, killing nine people and injuring seven.

Ukrainian President Volodymyr Zelensky described the attack as “deliberate killing of civilians.”

ISW added that the bigger picture is: “Russian forces are sustaining significant battlefield losses at rates that are likely unsustainable in the medium- to long-term,” and Putin “has mismanaged Russia’s economy which is suffering from unsustainable war spending, growing inflation, significant labor shortages, and reductions in Russia’s sovereign wealth fund.”

However, “the Kremlin has not been preparing the Russian information space for a peace agreement in the near future and that Russian forces and society do not anticipate an imminent end to the war,” the ISW team wrote in a warning to those monitoring talks toward some sort of ceasefire.

Monday, President Zelensky wrote on social media of last weekend’s talks in Istanbul:

“The Ukrainian delegation succeeded in keeping the talks in a dignified manner. All Russian attempts to issue threats were rejected.”  Still, he continued, “Ukraine insists on the need for a full and unconditional ceasefire in order to save human lives and to establish the necessary foundation for diplomacy.  Such a ceasefire must be long enough and include the possibility of extension.  Our proposal, shared by our partners, is 30 days – we are ready for this,” he said.

“Ukraine is not afraid of direct talks with Russia, and it is important that the Russian leadership not prolong the war,” Zelensky added.  He’s also ordered the establishment of what he called “a permanent, expanded national negotiation group” for potential future talks with Russian officials – at least in part because Zelensky visited Turkey last week for face-to-face talks with Putin, but Putin sent lower-level negotiators to Istanbul instead.

Zelensky met with Secretary of State Rubio and Vice President JD Vance in Rome on Sunday.  [Vance talked with Pope Leo as well.]  During those brief talks, “I reaffirmed that Ukraine is ready to be engaged in real diplomacy and underscored the importance of a full and unconditional ceasefire as soon as possible,” Zelensky said afterward.

Andrei Kolesnikov, a political analyst based in Moscow, told the Wall Street Journal Monday, “Putin aims to stall by avoiding a cease-fire and to keep Trump’s trust by not losing the chance to maintain good relations with the U.S.”  Kolesnikov added: “Putin will try to convince Trump that he remains committed to peace, but the Russian side will continue to reject the ‘first cease-fire, then negotiations’ formula.”

President Trump then held calls with Presidents Putin and Zelensky on Monday.

After the call with Trump on Monday morning, Washington time, the Kremlin, and Putin, responded, the Russian leader saying he is prepared to discuss “compromises” on Ukraine after a “frank conversation” with his U.S. counterpart.

“It was a very informative and quite a frank conversation, and very useful in this respect. First of all, I thanked the U.S. president for U.S. support in resuming direct negotiations between Russia and Ukraine on a possible peace agreement.

“The U.S. president voiced his position on a ceasefire.  For my part, I noted that Russia, too, favors a peaceful settlement of the Ukrainian crisis. We simply must determine the most effective ways of moving towards peace.”

“Contacts between participants in the Istanbul talks have been resumed, which gives reason to believe that on the whole we’re on the right track,” Putin added.

There’s no indication of a massive shift in Russia’s position as Putin yet again says the “root causes of the crisis” must be addressed – the reasons why Russia invaded Ukraine in the first place.

However, he raised the prospect of a joint “memorandum” with Ukraine, paving the way to a ceasefire and ultimately a peace deal with Ukraine, although the possible conditions in any of these documents remain as unclear as ever.

Another takeaway is that, according to Putin, the Russian and Ukrainian negotiators have continued contacts after the inconclusive talks in Istanbul.

Putin, like his lead negotiator in Istanbul, Vladimir Medinsky, suggested that Russia is prepared to discuss “compromises” – but there’s zero clarity on what they may be.

President Trump followed the Kremlin with his reading of the call on Truth Social:

“Just completed my two hour call with President Vladimir Putin of Russia. I believe it went very well. Russia and Ukraine will immediately start negotiations toward a Ceasefire and, more importantly, an END to the War.  The conditions for that will be negotiated between the two parties, as it can only be, because they know details of a negotiation that nobody else would be aware of. The tone and spirit of the conversation were excellent.  If it wasn’t, I would say so now, rather than later. Russia wants to do largescale TRADE with the United States when this catastrophic ‘bloodbath’ is over, and I agree.  There is a tremendous opportunity for Russia to create massive amounts of jobs and wealth. Its potential is UNLIMITED.  Likewise, Ukraine can be a great beneficiary on Trade, in the process of rebuilding its Country.  Negotiations between Russia and Ukraine will begin immediately.  I have so informed President Volodymyr Zelenskyy, of Ukraine, Ursula von der Leyen, President of the European Commission, President Emmanuel Macron, of France, Prime Minister Giorgia Meloni, of Italy, Chancellor Friedrich Merz, of Germany, and President Alexander Stubb, of Finland, during a call with me, immediately after the call with President Putin. The Vatican, as represented by the Pope, has stated that it would be very interested in hosting the negotiations.  Let the process begin!”

Total garbage.  Trump said nothing about extending intelligence sharing and giving Kyiv arms, without which Ukraine is doomed.  It’s all about trade, says Trump!  No pressure on Russia.

As the New York Times put it: “Russia and Ukraine have to find a solution to the war themselves, just days after saying that only he and Mr. Putin had the power to broker a deal,” the Times citing six officials who were familiar with the discussions.

The European Union, on the other hand, piled more sanctions on Russia after Trump’s call with Putin.  The EU announced its 17th package of sanctions, targeting Russia’s “shadow fleet” of third-party shipping partners as well as Russian energy, industry, and individuals.  German Foreign Minister Johann Wadephul declared, “We have made clear again and again that we simply expect one thing from Russia now: namely, a ceasefire, unconditional and immediate,” according to the AP.

“While Putin feigns interest in peace, more sanctions are in the works,” promised Kaja Kalla, the EU’s high representative for foreign affairs and security policy.

President Zelensky said on X: “It is obvious that Russia is trying to buy time in order to continue its war and occupation.”

David Ignatius / Washington Post:

“The first and biggest problem is that Putin has shown no evidence that he wants peace. He still wants victory, which he described once again after Monday’s call with the phrase “eliminate the root causes of the crisis.”* That’s code for his conviction that Ukraine cannot be a European country, as it wants, but must remain under Russia hegemony.

“Putin launched the war on this illusion that Ukraine wasn’t a real nation and wouldn’t fight hard for its sovereignty.  How wrong he was. Russia has suffered approximately 800,000 dead and wounded, and in three years its huge army hasn’t even managed to conquer Donetsk. When the guns go silent, Russia will begin to reckon with Putin’s stupendous folly.  No wonder why he prefers to keep fighting….

“Henry Kissinger, arguably the best dealmaker in modern diplomatic history, offered a useful warning: ‘Any negotiator who seduces himself into believing that his personality leads to automatic breakthroughs will soon find himself in the special purgatory that history reserves for those who measure themselves by acclaim rather than achievement.’

“Trump has a chance to help mediate an agreement that would end the most violent conflict of our era. But if he doesn’t find the patience for hard and well-organized bargaining with Putin, Ukraine will have no choice but to fend for itself – leaving a black mark for Trump rather than a badge of honor.”

* By “root causes” Russia means NATO forswearing adding new members and promising to retreat to its 1997 borders, before its post-Cold War enlargement. The Kremlin also insists that Ukraine recognize the four territories annexed by Russia – none of which Russia fully controls – commit to permanent neutrality, and President Zelensky must leave, replaced by a leader of the Kremlin’s choosing.

Months after telling voters he would end Russia’s Ukraine war in 24 hours if elected, President Trump is now telling European officials in private that he doesn’t think Vladimir Putin wants to end his invasion and occupation of Ukraine, the Wall Street Journal reported Thursday.

“European leaders had long believed this – but it was the first time they were hearing it from Trump,” European officials told the Journal.  “It also ran counter to what Trump has often said publicly, that he believes Putin genuinely wants peace.”

The view from Kyiv: “We need to know who we can count on, and who we can’t. A support package from Europe is coming, and it will be a strong one,” President Zelensky said this week.  “As for the package from the United States – that’s a different story.”

—Russian attacks on Ukraine will likely persist over the summer, according to Jack Watling of the London-based Royal United Services Institute in a commentary published Tuesday.  He expects Russia to focus efforts on the areas of Kostyantynivka and Pokrovsk and intensify its attacks in the buildup of the June NATO Summit in the Hague.

Also, Reporters Without Borders announced in a report published last weekend that Russia has taken to more deliberate targeting of radar stations to knock out Ukraine UAV operations and is now bombing hotels hosting reporters.

—A Russian missile attack on a Ukrainian military shooting range killed six servicemen and wounded at least 10 more during training on Tuesday, Ukraine’s national guard said on Wednesday, adding that the commander of the unit had been suspended.

Russia claimed the strike in the Sumy region, near the Russian border, killed up to 70 service members, including 20 instructors.

Russia’s defense ministry said on Thursday that it had shot down 485 drones between Tuesday night and Thursday morning, targeting 10 Russian regions, that Ukraine had fired over a 36-hour period.  It was not clear how much damage was caused by the strikes.  Ukraine didn’t comment.

Meanwhile, President Putin was said to have visited the Kursk region for the first time since Russian forces ejected Ukrainian troops from the area, the Kremlin said.

—Friday, Ukraine and Russia began conducting a massive prisoner swap, the two having agreed in Istanbul to swap 1,000 prisoners each – the only substantial outcome of the meeting, which failed to reach agreement on a ceasefire deal proposed by Trump.

—Russia’s military is bolstering bases along its border with Finland. That includes rows of tents, “new warehouses that can store military vehicles; renovations to fighter jet shelters; and steady construction activity on a helicopter base that had been mostly unused and overgrown,” the New York Times reported Monday after reviewing new satellite imagery.

So far, “NATO officials say this is nothing like the buildup along the Ukraine border before Russia’s full-scale invasion in 2022…But Finland is one of NATO’s newest members, joining two years ago, and the moves no doubt reflect Moscow’s own perception of a threat.”

—

Israel/Gaza: After announcing Sunday that the Israeli military had begun “extensive ground operations” throughout the northern and southern Gaza Strip, airstrikes killed at least 103 people, including dozens of children, overnight and into Sunday, hospitals and medics said.  The day before, 58 Palestinians were killed in separate attacks, bringing the toll, before Saturday night’s airstrikes to over 300 since Thursday.

Israel then pressed ahead Tuesday with the offensive despite mounting international criticism, launching airstrikes that health officials said killed at least 85 Palestinians.  Israeli officials said they also allowed in dozens more trucks carrying aid.

But two days after aid began entering Gaza, the new supplies had not yet reached people in Gaza, according to the United Nations.

Under pressure, Israel agreed this week to allow a “minimal” amount of aid into the Palestinian territory after preventing the entry of food, medicine and fuel in an attempt to pressure Hamas.

But the UN said Israel’s security process for getting aid cleared to warehouses was “long, complex, complicated and dangerous.”  A UN spokesperson said Israeli military requirements for aid workers to unload and reload the trucks are hindering efforts to distribute the aid, which includes flour for bakeries, food for soup kitchens, baby food and medical supplies.

[Thursday, UN aid officials said some aid was beginning to trickle in and reach bakeries in central and southern Gaza, but with large crowds rushing to collect the bread, there were safety concerns for the bakery workers.]

On Tuesday, Prime Minister Benjamin Netanyahu said he was recalling his high-level negotiating team from Qatar after a week of ceasefire talks failed to bring results.

—In the days following the Hamas-led Oct. 7, 2023, attack, Israelis were unified in the belief that the country had to fight back.  But more than 19 months later, support for the war has fallen sharply.

Polls now show that around 70% of Israelis support an end to the war in exchange for the release of the remaining hostages.  It used to be that for months after the attack, weekly protests in Tel Aviv and around the country demanded Netanyahu bring them home, but most protesters hardly ever carried signs calling for an end to the fighting.  Today, posters all over Tel Aviv explicitly call for an end to the war.

Repeated tours of duty for Israeli reservists have exhausted troops and their families, and commanders say recruiting is getting harder.

–Related to the above, the UK suspended trade negotiations with Israel on Tuesday and leveled new sanctions targeting settlements in the occupied West Bank.  The move came a day after the UK, France and Canada condemned Israel’s handling of the war and its actions in the West Bank.

“I want to put on record today that we’re horrified by the escalation from Israel,” British Prime Minister Keir Starmer told Parliament.

Israel said there never were real trade talks.

—Wednesday evening in Washington, D.C., two staff members of the Israeli Embassy were fatally shot while leaving an event at the Capital Jewish Museum. The suspect, who was immediately apprehended, yelled, “Free, free Palestine” after he was arrested.

The attack was seen by officials in Israel and the U.S. as the latest in a growing wave of antisemitism as Israel ramps up its offensive in the Gaza Strip.

We then learned that the victims were a couple – Yaron Lischinsky, 30, and Sarah Milgrim, 26, who met at the embassy and were to be engaged in Israel next week.

Just a sickening tragedy. The suspect, identified as Elias Rodriguez of Chicago, was charged with first-degree murder and could face the death penalty.  Justice in this case needs to be swift to send a message.

Iran: The country’s president said Iran will continue talks with the United States over its rapidly advancing nuclear program but will not withdraw from its rights because of U.S. threats.

“We are negotiating, and we will negotiate, we are not after war but we do not fear any threat,” President Masoud Pezeshkian said during a speech to navy officials broadcast by state television Saturday.

“It is not like that they think if they threaten us, we will give up our human right and definite right,” Pezeshkian said.  “We will not withdraw, we will not easily lose honorable military, scientific, nuclear in all fields.”

Tuesday, Supreme Leader Ayatollah Ali Khamenei said U.S. demands that Tehran refrain from enriching uranium are “excessive and outrageous,” state media reported, voicing doubts whether nuclear talks will lead to an agreement.

“I don’t think nuclear talks with the U.S. will bring results. I don’t know what will happen,” Khamenei said, adding that Washington should refrain from making outrageous demands in the negotiations.

Despite expectations that a fifth round of negotiations might take place over the weekend in Rome, nuclear talks are on shaky ground as both Iran and the U.S. have clashed on the issue of nuclear enrichment.

Deputy Foreign Minister Majid Takht-Ravanchi said on Monday that talks would fail if Washington insists that Tehran refrains from domestic enrichment of uranium, which the U.S. says is a possible pathway to developing nuclear weapons.

Tehran says its nuclear energy program has entirely peaceful purposes.

Appearing on ABC’s “This Week” on Sunday, President Trump’s Mideast envoy, Steve Witkoff, said that enrichment was “one very, very clear red line” for the administration.

“We cannot have that because enrichment enables weaponization, and we will not allow a bomb to get here,” he said.  Even “1 percent of an enrichment capability” would be too much, Witkoff added.

Last week President Trump said Tehran needed to “move quickly or something bad is going to happen.”

Trump has repeatedly warned Iran it would be bombed and face severe sanctions if it did not reach a compromise to resolve its disputed nuclear program.

Just to repeat, during his first term Trump withdrew the United States from a 2015 deal between Iran and world powers that placed strict limits on Tehran’s enrichment activities in exchange for relief from international sanctions.  You had inspectors on the ground.

But Trump branded the deal one-sided in Iran’s favor, reimposed sweeping U.S. sanctions against the regime, and Iran responded by booting the inspectors and escalating enrichment.

North Korea: The regime suffered an embarrassing setback during the failed launch of a new warship in front of Kim Jong Un at the northeastern port of Chongjin Wednesday, state-run media reported in an unusual public acknowledgement.  “A serious accident occurred in the course of the launch of the destroyer,” KCNA said Wednesday.

During a side launch, which Reuters reports was risky given the size of the vessel, North Korea’s “newly built 5,000-ton-class destroyer became unbalanced and was punctured in its bottom sections after a transport cradle on the stern section slid off first and became stuck,” according to the Associated Press, which paraphrased KCNA’s reporting.

“South Korean military officials, who were monitoring the ship’s launch with the help of satellite images, said on Thursday that the ship was lying on its side in the water after the failed launch,” the New York Times reported.

According to KCNA, “After watching the whole course of the accident, the respected Comrade Kim Jong Un made (a) stern assessment, saying that it was a serious accident and criminal act caused by sheer carelessness, irresponsibility and unscientific empiricism which should never occur and could not be tolerated.”

By Friday, Pyongyang was denying the warship suffered major damage, which was belied by new satellite imagery showing large sections of the vessel covered in blue tarp as it lay on its side.  North Korea is claiming it will take about 10 days to repair, but outside observers question that timeframe because damage to the ship appeared to be much worse than what North Korea claims.

South Korea: The Trump administration is considering shifting 4,500 troops from South Korea to other locations across the Pacific, including Guam, the Wall Street Journal reported Thursday.

A caveat: “U.S. officials say a decision on troop levels won’t come until there is more clarity about the direction of the war in Ukraine and whether the administration will keep supporting Kyiv militarily,” the Journal reports.

Having been to Guam five times, I can tell you the infrastructure there is not good and when it’s hit by a big typhoon, the massive base’s operations already there can be severely disrupted.

Romania: In a shocking result, the liberal-, pro-EU mayor of Bucharest, Nicusor Dan, fought off a strong challenge from the Romanian right-wing nationalist, George Simion, to the presidency after months of political turmoil.

Simion won a dramatic first-round victory earlier this month, riding a wave of anger from Romanians who had seen the presidential race annulled late last year because of claims of Russian interference.

But it was the soft-spoken mathematician, Dan, 55, who swept to victory with 53.6% of the vote to Simion’s 46.4%, after being behind in the polls.

Simion had pledged to put Romania on a path inspired by President Donald Trump’s politics.

Dan has pledged to fight rampant corruption, to maintain support for Ukraine – where Romania has played an important role – and to keep the country firmly within the European mainstream.

Random Musings

—Presidential approval ratings….

Gallup: 44% approve of President Trump’s job performance, while 53% disapprove.   37% of independents approve (Apr. 1-14).  Due for a new poll.

Rasmussen: 50% approve, 49% disapprove (May 23).

—Former President Biden was diagnosed with an aggressive form of prostate cancer, his office announced in a statement Sunday.

Biden was in a Philadelphia hospital last week, where doctors discovered a “small nodule” on his prostate that they said required further examination.  The former president, 82, had been experiencing urinary symptoms, his office said.

The cancer had metastasized to the bone, spokesperson Kelly Scully said in the statement.  Scully’s statement also said that his cancer was “characterized by a Gleason score of 9.”

The Gleason grading system is used to assess how aggressive a prostate cancer is, with a score of 9 indicating the cancer is very aggressive and likely to grow and spread quickly.

“While this represents a more aggressive form of the disease, the cancer appears to be hormone-sensitive which allows for effective management,” Scully said.  “The president and his family are reviewing treatment options with his physicians.”

The former president’s office said he had been diagnosed two days earlier, Friday.

Immediately following the announcing there was an outpouring of love and support, including from President Trump, who posted on Truth Social:

“Melania and I are saddened to hear about Joe Biden’s recent medical diagnosis. We extend our warmest and best wishes to Jill and the family, and we wish Joe a fast and successful recovery.”

Biden posted a smiling selfie alongside Jill Monday as he sent thanks for the support he’s had since revealing his battle.

“Cancer touches us all.  Like so many of you, Jill and I have learned that we are strongest in the broken places. Thank you for lifting us up with love and support.”

But then the backlash came, with some stunned longtime aides saying his cancer should have been caught long before it spread to his bones, and that they fear concern about public reaction delayed a possible diagnosis.

Unlike the apparently concerted coverup of Biden’s declining mental fitness, through various reports, some aides suspect willful ignorance of his condition out of fear of the effect that a prognosis would have on last year’s election – in which Biden repeatedly refused to bow out to allow Democrats an open contest for his successor until it was too late.

“I just don’t know how they just, kind of find this out on a Friday, and it’s this far advanced and serious,” a former Biden White House aide told the New York Post.  “[If it’s] in the bones, there’s gotta be a discomfort… I think they just didn’t test.”

We then learned later in the week that the last time Biden supposedly had a PSA test was in 2014.  The test was not mentioned on Biden’s February 2024 physical report, his last such exam while in office.

Medical experts said Monday that Biden likely had prostate cancer for years before it metastasized.

“He did not develop it in the last 100, 200 days.  He had it while he was president,” oncologist Dr. Zeke Emanual, an appointee to Biden’s Covid-19 advisory board, told MSNBC’s “Morning Joe.”

“He probably had it at the start of his presidency in 2021. I don’t think there’s any disagreement on that.”

The ex-White House aide told the Post he was skeptical of the timing of Sunday’s announcement, two days before the release of a highly promoted book, “Original Sin,” accusing his team of covering up his mental and physical decline.

“You can’t dunk on a man with cancer.  [“Original Sin” co-authors Jake] Tapper and [Alex] Thompson have to be more careful now.  They were gearing up for a steamroll,” the aide said.

“The American people have sympathy for an old man with cancer.  It’s just like [special counsel Robert] Hur said [about Biden mishandling classified documents], “ ‘Can’t put him on the stand.’”

I’ve said my piece on Joe Biden.  He was a miserable president (I’m being kind).  Even when he was right, such as on support for Ukraine, he slow-walked critical aid at every step.

I also predicted in this space at the end of 2022 that he wouldn’t make it through 2023.  I saw a man who was rapidly declining physically, just like so many of you also saw, and then at the end of 2023, I said, for a second year, that during Christmas at the Biden compound, Jill and others in the family had to encourage Joe to announce he wasn’t seeking another term.

I have long blamed Dr. Jill more than anyone.  But as Maureen Dowd wrote in her New York Times column the other day:

“It was not just Joe and Jill who wanted to hang on to power, with all the perks and trips and, for Jill, glamorous Vogue covers.  It was also their advisers, Mike Donilon, Steve Ricchetti, Anita Dunn, Anthony Bernal, Ron Klain and Annie Tomasini.  The ‘palace guard,’ as Chuck Schumer derisively dubbed top Biden advisers, slid from sycophancy to solipsism.

“The more Biden was out of it, the more his hours and responsibilities were curtailed, the more of a vacuum there was at the top, the more power the advisers had.  They treated his alarming deterioration like a political vulnerability, something to be concealed, not a matter of concern to all Americans, something we had a right to know….

“The Bidens and their allies still try to prove Biden is all there.  He has done interviews on ‘The View’ with Jill, and the BBC on his own, acting as though what happened was not a shocking tableau of duplicity.”

—Congressman Gerry Connolly, a powerful Virginia lawmaker who was the top Democrat on the House Oversight committee, died weeks after announcing plans to retire.  He was 75.

Connolly, who was diagnosed with esophageal cancer in November, died at his home.  At first, it seemed he was winning his battle, but then he admitted fairly recently that he had suffered a relapse, thus his plan to retire.

With Connolly’s passing, the Republican-controlled House is split 220-212.

Two other seats held by former Democratic Reps. Raul Grijalva of Arizona and Sylvester Turner of Texas, both of whom died in March, remain vacant.

—The Supreme Court on Monday let the Trump administration, for now, remove protections from nearly 350,000 Venezuelan immigrants who had been allowed to remain in the United States without risk of deportation under a program known as Temporary Protected Status.

The court’s brief order was unsigned and gave no reason, which is typical when the justices rule on emergency applications.  No vote count was listed, though Justice Ketanji Brown Jackson noted that she would deny the administration’s request.

The justices also clarified, however, that they would preserve the ability of individual immigrants to bring some legal challenges if the government tried to cancel their work permits or to remove them from the country.

—Kristi Noem, the homeland security secretary, bungled answers on habeas corpus, incorrectly asserting that the legal right of people to challenge their detention by the government was actually the president’s “constitutional right” to deport people.

As the Trump administration works to carry out its promised mass deportations, officials have floated the idea of suspending habeas corpus for immigrants being expelled from the country.

At a Senate hearing, Senator Maggie Hassan, Democrat of New Hampshire, asked Ms. Noem about the issue.  “Secretary Noem,” she asked, “what is habeas corpus?”

“Well,” Noem said, “habeas corpus is a constitutional right that the president has to be able to remove people from this country and suspend their right to – “

“No,” Sen. Hassan interjected.  “Let me stop you, ma’am. Excuse me, that’s incorrect.”

Noem was flipping the legal right on its head, turning a constitutional shield against unlawful detention into broad presidential authority.

Article I of the Constitution, which focuses on the powers of Congress, says that writs of habeas corpus are a privilege that “shall not be suspended, unless when in cases of rebellion or invasion the public safety may require it.”

Last week, Stephen Miller, the main architect of Trump’s immigration policy, said that the administration believed it could suspend the right of immigrants to challenge their detentions in court in order to speed up deportations.

—Ms. Noem then issued the administration’s statement Thursday concerning Harvard, yanking its authorization to enroll foreign students, a major escalation and financial blow in the government’s pressure campaign against the nation’s most prominent university.

Harvard enrolls about 7,000 international students, and like many U.S. universities, it relies on their tuition payments which are often full-freight.  The administration has already pulled billions of dollars in federal research funding from the school and threatened its tax-exempt status, citing concerns about antisemitism and DEI.

“Consequences must follow to send a clear signal to Harvard and all universities that want to enjoy the privilege of enrolling foreign students, that the Trump administration will enforce the law and root out the evils of anti-Americanism and antisemitism in society and campuses,” Noem wrote, after spending an hour putting on her makeup.

Harvard called the move “unlawful.”  Existing international students must transfer or lose their legal status, DHS said.

Former Treasury Secretary Lawrence Summers, who is president emeritus of Harvard, blasted the administration’s decision.

“This is vicious, it is illegal, it is unwise, and it is very damaging,” Summers told Bloomberg TV.  “Why does it make any sense at all to stop 6,000 enormously talented young people who want to come to the United States to study from having that opportunity?”

“Harvard must start by resisting,” he said.  “This is the stuff of tyranny.”

“I am just appalled that we would have an administration that would contemplate actions of this kind,” Summers said.  “If I had been a member of an administration where such unlawful orders had come from the White House, I would have resigned immediately.”

He said it was unfair to target U.S.-loving, international students “many of whom dreamed for their whole lives” of having the opportunity to study at Harvard.  “They saw Harvard as a symbol of what was the best of America.”

Trump’s actions were also a gift to other countries around the world who are also targeting the lucrative market that overseas students present.  “We are doing our very best as a country to help British higher education, Australian higher education, New Zealand higher education,” Summers said.

The U.S. is taking “the pride of our country” and we are destroying it, Summers said. “It is a devastating, self-inflicted wound.”

Harvard on Friday then sued the administration for a second time.

“We condemn this unlawful and unwarranted action,” Dr. Alan Garber, Harvard’s president, said in a letter to the Harvard community.  “It imperils the futures of thousands of students and scholars across Harvard and serves as a warning to countless others at colleges and universities throughout the country who have come to America to pursue their education and fulfill their dreams.”

A federal judge this afternoon temporarily blocked the government’s bid to prevent Harvard from enrolling international students.

—A federal judge blocked the administration’s wide-scale efforts to dismantle the Education Department, saying it effectively gutted the agency without Congress’ consent.

“This court cannot be asked to cover its eyes while the Department’s employees are continuously fired and units are transferred out until the Department becomes a shell of itself,” wrote U.S. District Judge Myong Joun in Boston.

Joun said the Education Department’s cuts have already undermined education research, civil rights enforcement and financial aid support.

Thursday’s ruling ordered the administration to reinstate department employees who had been fired and prohibited it from implementing Trump’s executive order directing Education Secretary Linda McMahon to dismantle the agency.

—The Justice Department opened a criminal investigation of Andrew Cuomo, the front-runner in the New York City mayoral race, after Republicans accused him of lying to Congress about decisions he made during the pandemic as governor.

The inquiry, begun about a month ago by the U.S. attorney’s office in Washington, comes after senior Justice Department officials in February demanded the dismissal of an indictment of the city’s current mayor, Eric Adams, on corruption charges.

So the Trump administration ended a criminal case against the leader of the nation’s largest city and opened one into his chief rival in the span of several months.  Adams is running for re-election as an independent, while Cuomo is leading the Democratic primary field in the polls.

—President Trump ambushed South Africa’s visiting president, Cyril Ramaphosa, in an Oval Office meeting, attended by the press. Trump made several false statements and misrepresented some facts about the alleged persecution of South Africa’s white minority.

Ramaphosa tried to rebuff the assertions and he kept his cool, which reports say back home went over very well.  Trump had his staff play a video consisting mostly of years-old clips of inflammatory speeches by some South African politicians that have been circulating on social media, with the support of South African-born Elon Musk, who was in attendance.

But the theory, some would say conspiracy theory, that there is a genocide of white farmers in South Africa simply is not true.

What is true, as Ramaphosa conceded, is that South Africa has one of the world’s highest murder rates, with an average of 72 a day, in a country of 60 million, most victims being Black.

South African police recorded 26,232 murders nationwide in 2024, of which 44 were linked to farming communities.  Of those, eight of the victims were farmers.

The high court in Western Cape province ruled that claims of white genocide were “clearly imagined and not real” in a case earlier this year, forbidding a donation to a white supremacist group on those grounds.

The government does have a policy of attempting to redress inequalities in land ownership that are a legacy of apartheid, but no land has been expropriated, and the government has instead tried to encourage white farmers to sell their land willingly.

That hasn’t worked.  Some three-quarters of privately-owned farmland is in the hands of whites, who make up less than 8% of the population, while 4% is owned by Black South Africans who make up 80%.

Ramaphosa did sign a law in January allowing the state to expropriate land “in the public interest,” in rare cases without compensating the owner.  The law requires authorities to first try to reach an agreement.  It still hasn’t been used.

Some land has been illegally occupied over the years, mostly by millions of desperate squatters with nowhere else to go.  [Reuters]

—The White House blamed exposure to environmental toxins, poor nutrition and increased screen time for a decline in Americans’ life expectancy Thursday, in a major administration report that also casts doubt on the current vaccine schedule and medications deemed safe by mainstream medicine.

“The MAHA Report: Making Our Children Healthy Again,” written by Cabinet officials and administration scientific leaders in response to an executive order from President Trump, declared that “today’s children are the sickest generation in American history in terms of chronic disease.”

Secretary of Health and Human Services Robert F. Kennedy Jr. said the “prescription” for the report’s findings would come in August, when new policies would be unveiled by the administration.

The grim report highlighted crises including childhood obesity and declining mental health with sweeping warnings, but did not address structural issues such as physician shortages or high health care costs.

Kennedy said the report prioritizes a reimagining of nutrition by addressing the explosion of ultra-processed food in America’s diets, emphasizing the importance of whole foods.

The report raises doubts about the dozens of shots recommended in the childhood immunization schedule, contending there is “limited scientific inquiry into vaccine injury and potential links to chronic disease,” the language parroting the positions of anti-vaccine activists, including RFK Jr.

The report also states the obvious…children should be outside more, exercising, and spending less time on their phones, though regarding the latter, it would be helpful if their parents would spend less time on same as an example to the kids, especially when driving!!!

–In preparation for the military parade in Washington, D.C., on June 14, the Army will need to line DC with metal plates to protect the streets from tanks.

According to the latest known plans, the parade will feature 25 Abrams tanks which can weigh 60 tons or more. The metal plates are seen as the best way to protect the street, with each plate weighing hundreds of pounds.

Oh brother.

—Annual Covid-19 shots for healthy younger adults and children will no longer be routinely approved under a major new policy shift unveiled Tuesday by the Trump administration.

Top officials for the Food and Drug Administration laid out new requirements for yearly updates to Covid shots, saying they’d continue to use a streamlined approach that would make vaccines available to adults 65 and older as well as children and younger adults with at least one health problem that puts them at higher risk.

But the FDA framework urges companies conduct large, lengthy studies before tweaked vaccines can be approved for healthier people.

Well, I’m eligible and I’ll get it, though next fall’s shot is likely to be delayed.

–It’s official…the U.S. government will stop putting new pennies into circulation by early next year.  Businesses will round cash transactions up or down to the nearest 5 cents as pennies fade from circulation.

The U.S. lost more than $85 million last year making pennies.

—At least four people have died in flooding in southeastern Australia this week, after three days of incessant rain cut off entire towns, swept away livestock and destroyed homes.

A wild weather system dumped around four months of rain over three days.

Warragamba Dam, which supplies 80% of Sydney’s water supply and is currently nearing 100% of capacity, could spill over, officials said.

—Last weekend’s latest round of vicious storms in the Midwest and Southeast killed at least 28 people in Kentucky, Missouri and Virginia (some reports have 32 dead), leaving behind a trail of destruction.

At least 23 died in Kentucky and seven in Missouri, including five in St. Louis, where the devastation is immense.

But poor Kentucky.  These good folks can’t catch a break, whether it is historic tornadoes or flooding, scores having died over the last year.  The state had one tornado that was on the ground 50 miles with wind speeds up to 170 mph, which is EF4.

St. Louis had an EF3 with winds of 150 mph, according to the National Weather Service.

—

Pray for the men and women of our armed forces…and all the fallen, especially on Memorial Day.

Slava Ukraini.

God bless America.

—

Gold $3363…massive week, up about $165….
Oil $61.74

Bitcoin $108,778 [4:00 PM ET, Friday]

Regular Gas: $3.19; Diesel: $3.55 [$3.61 – $3.90 yr. ago]

Returns for the week 5/19-5/23

Dow Jones  -2.5%  [41603]
S&P 500  -2.6%  [5802]
S&P MidCap  -3.6%
Russell 2000  -3.5%
Nasdaq  -2.5%  [18737]

Returns for the period 1/1/25-5/23/25

Dow Jones  -2.2%
S&P 500  -1.3%
S&P MidCap  -4.6%
Russell 2000  -8.5%
Nasdaq  -3.0%

Bulls 42.3
Bears 26.9…split was 23.5 / 35.3 four weeks ago….

Hang in there. Enjoy the holiday.  Travel safe.

Auto racing fans are praying for no rain Sunday at both Indianapolis and Charlotte, so that racer Kyle Larson has a shot at the historic “double,” finishing both the Indy 500 and the Coca-Cola 600 the same day.

Brian Trumbore

*I am going live with the new version of StocksandNews either Wednesday or Thursday.  There are bound to be mistakes.

Migrating a full site to a new platform, especially one as intensive as mine on the archives front, is not easy.  And I’m also scared to death that I have to learn a new way to post the articles after 26 years.

But I will finally have a site that is SEO (Search Engine Optimization) compliant so that my rankings should surge in the appropriate categories, and among the benefits for you, I’m told it will be much easier to read the columns on your phones.

I will also be resurrecting my proprietary “All-Species List,” and by mid-June (if not sooner) will launch a daily, Monday through Friday, market-oriented YouTube video/podcast that I hope to air between 4:45 and 5:00 p.m. Eastern.

As in a lot more work for moi, as if I didn’t already have enough.  But as Tony Soprano would have said, ‘Whaddya gonna do….’