Jamie Dimon Issues Stern Warning on Bond Market
The bulls seem blind to warnings of a disaster ahead.
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The market battled to a standstill on the last trading session of May. The bulls celebrated a much stronger-than-expected rise in Personal Income while both Core PCE and Consumer spending declined. There was also a historic drop in the trade imbalance.
The bears shrugged and warned once again that the pain of tariffs is coming and that the bulls are blind to the disaster that awaits. JPMorgan Chase CEO Jamie Dimon gave the bears some additional ammunition when he commented that a crack in the bond market is "going to happen."
Market players panic sold for a few minutes at midday following some heated rhetoric about trade negotiations with China, but those concerns abated as efforts were made to schedule a call between President Trump and Chairman XI.
The month of May was very good for the S&P 500, which rose about 6.25%. The increase was due almost entirely to the postponement of tariffs on China and the European Union. The indices jumped higher on both those headlines but then failed to gain additional traction.
A good earnings report from Nvidia NVDA also helped, but the stock reversed all of its post-earnings gains and prevented sustained strength in the technology and AI groups from building.
We continue to have a market environment with generally positive news flow but also a very high level of concern that economic conditions will deteriorate. The bulls have been right, but the skeptical bears are not giving up.
Technical conditions are good with support holding, but the lack of upside progress is a problem and may foreshadow some difficulties in the near term.
Have a great weekend. I’ll see you on Monday.
At the time of publication, DePorre was long NVDA.
