“Follow the Money!”

Hi There! Lately, I’ve found myself sitting still, in the quiet hours, thinking about Freedom; not the kind you shout about, but the kind you feel deep in your spirit. The kind that lets you breathe fully, live honestly, and create boldly.

Freedom, for me, is the soil from which everything I am continues to grow. It’s what allows me to write these words, to build a life shaped by values and vision instead of fear and force. It lets me explore, dream, and stretch beyond the limitations I once thought were fixed.

But here's what’s been sitting heavy on my heart: I am not entitled to that freedom; I am indebted to it. And more so, indebted to those who carried that weight on their shoulders, who answered the call and never came home.

Today, I honour the brave souls who gave everything so that we might have something. Their sacrifice is the reason we get to speak, sing, dance, rest, and rise again….to be free. May we never grow numb to that price. May we live in a way that makes their sacrifice count.

Alright, let’s dig in!

U.S. Markets Recap (May 18- May 24, 2025)

After a red-hot rally the week prior, U.S. stocks hit pause. The market’s enthusiasm cooled as tariff threats re-emerged, bond yields spiked, and concerns over fiscal policy returned to the spotlight. The S&P 500 logged its longest losing streak since early April. While some sectors found footing, risk appetite faded fast, especially after fresh tariff warnings targeting Apple and the EU rolled out last Friday.

Overseas, global bonds sold off and European equities reversed weekly gains. Meanwhile, commodities climbed thanks to strong metal performance and a softer U.S. dollar. And in the crypto world: Bitcoin celebrated “Pizza Day” with a fresh all-time high.

Equities:

Major U.S. indexes ended last week lower, snapping back from a multi-week rally. Early-week trading was subdued with light volumes, but by last Wednesday, markets turned sharply as a weak 20-year Treasury auction sent yields higher and stocks lower. By Friday, investor nerves were rattled again as President Trump threatened:

• 25% tariffs on Apple if iPhones continue to be manufactured overseas.

• 50% levies on EU imports starting in June if trade talks don’t progress.

Retail earnings offered a mixed bag:

• Target (TGT): Missed expectations and cut guidance.

• Lowe’s (LOW): Beat estimates and reaffirmed outlook.

• Home Depot (HD): Held steady, no price hikes planned.

• Nike (NKE): Announced return to Amazon (first time since 2019) and possible price increases.

Fixed Income:

Bond markets stole the spotlight this week:

• 10-year yield: +2 bps

• 30-year yield: +8 bps after trading in a wide 26-basis point range

• 2-year yield: Tick lower by 1 bp

What drove this?

• Weak demand in the 20-year Treasury auction

• Persistent debt and deficit worries

• Global pressure: Japan’s 20-year auction was the worst since 1987

• Moody’s recent U.S. downgrade

• Heightened inflation and Fed’s hawkish pause

Investors are demanding higher returns for long-term debt, not just in the U.S., but across developed markets.

Commodities:

The Bloomberg Commodities Index climbed last week, reversing the prior week’s drop.

• Gold: Gained as investors sought safety amid bond and equity weakness.

• Silver & Copper: Saw strong buying as industrial demand held firm.

• WTI Crude: Fell despite geopolitical tensions (Israel-Iran risks) due to:

  • Unexpected inventory builds

  • Higher imports

  • Weaker gasoline and distillate demand

• Natural Gas: Continued its slide amid soft cooling demand.

Currencies:

The U.S. dollar weakened, snapping a four-week winning streak.

Reasons:

• Lack of progress in U.S.-EU trade talks

• Reignited tariff concerns

• Fiscal pressures dampening sentiment

Currency weakness helped metals rally but did little to support risk assets overall.

U.S. Economic Recap (May 18 - May 24, 2025)

It was quieter last week for economic data, but some important releases still moved the needle:

• Jobless Claims: Fell slightly to 227,000 (from 230,000 expected), signaling continued labour strength.

• PMI (Purchasing Managers’ Index): Surprised to the upside with modest growth.

• Reconciliation Bill: Passed the House on Thursday, but optimism was short-lived. The White House’s aggressive trade stance clouded potential stimulus gains.

Fed officials maintained a “wait-and-see” posture, emphasizing that while inflation is cooling, the bar for a rate cut remains high.

Global Markets Recap (May 18 - May 24, 2025)

Europe:

• Finished the week lower after new U.S. tariff threats.

• ECB rate cut hopes pulled back.

• Positive highlight: Post-Brexit trade progress helped early-week sentiment.

• Corporate laggards: EasyJet, Freenet

• Standout: Ryanair, which rallied on strong summer travel demand and a buyback announcement.

Asia:

• Japan: Markets slipped on BOJ bond tapering concerns and rising yields. Inflation came in hot, fueling talk of future hikes.

• Taiwan & South Korea: Ended lower despite strength in chip and pharma names. Tariff impact fears lingered.

• Hong Kong: Finished higher

• Mainland China: Mixed week with selective gains in healthcare and tech.

Crypto Recap (May18 - May 24, 2025)

Bitcoin had a blockbuster week:

• BTC Weekly Gain: +5.71%

• BTC Dominance (BTC.D): Rose to 64.17%

• New All-Time High: $111,970.17, powered by:

  • $2.75B inflows into U.S. spot Bitcoin ETFs

  • Corporate demand leading over ETF and retail purchases

Also celebrated: Bitcoin Pizza Day (May 22), marking the now-legendary 10,000 BTC pizza purchase worth over $1.1 billion today.

Top crypto gainers last week: $JUP, $AAVE, $HYPE

Here are other key highlights from last week:

• JPMorgan to support Bitcoin buying despite Jamie Dimon’s ongoing skepticism.

• FIFA teamed up with Avalanche to build its own blockchain.

• Solana announced a major design overhaul.

• Tariff flux pushed brands to bet big on digital merch.

• Polygon co-founder stepped down and will be 'cheering from the sidelines'.

This week is packed with high-impact economic news!

Key U.S. Economic Releases to watch:

• Tuesday:

  • Durable Goods Orders

  • House Price Index

  • Consumer Confidence

• Wednesday:

  • FOMC Minutes

• Thursday:

  • Q1 GDP

  • Jobless Claims

  • Pending Home Sales

• Friday:

  • Core PCE (Fed’s preferred inflation gauge)

  • Consumer Sentiment

Fed speeches this week:

• TUES: Kashkari, Williams, Waller

• WED: Kashkari

• THURS: Barkin, Goolsbee, Kugler, Daly, Logan

• FRI: Bostic, Goolsbee

Traders should stay alert for shifts in tone as inflation and fiscal debates swirl.

Earnings: 

This week brings heavyweight reports from:

• Nvidia (NVDA): AI sentiment bellwether

• Salesforce (CRM): Enterprise software health check

• Costco (COST): Consumer spending and margin insights

Other notable earnings for the week is outlined in red in the chart below.

Medium-to-High Impact Global Economic Events This Week:

Week 5/18/25 - 5/24/25 Recap

Special Tools and Strategies - Sector Rotation

Have you ever wondered if there's a way to keep your money in the best-performing sectors at all times?

To have your overall portfolio looking green even when the market is down?

You may want to consider sector rotation. This is an investment strategy that could transform how you think about timing the market and keeping your money working smarter.

Sector rotation is an active investing strategy where investors move money between the major stock market sectors based on the current stage of the economic cycle. The goal is to always be positioned in the sectors most likely to outperform.

There are four key stages in the economic cycle, and each one tends to favour different types of companies:

These cycles are not precise clocks, but understanding them helps investors anticipate where capital might flow next.

How to Start Rotating Sectors with ETFs

For beginners, the easiest way to implement a sector rotation strategy is through sector ETFs, that is, through funds that track the performance of a specific part of the market, like tech or energy.

Here’s a simplified sequence that often mirrors the business cycle:

This rotation reflects how capital typically moves from aggressive growth sectors early in a recovery, to more defensive sectors during slowdowns.

You don’t need to guess each turn. Watch for price trends across sectors. For instance, if tech and consumer discretionary start breaking out after a recession, it may be time to increase exposure there.

Practical First Steps

• Observe before acting: Watch at least one full economic cycle to understand sector behaviour.

• Start small: Use small position sizes while you learn the signals.

• Use sector ETFs: They're diversified and easier to manage than individual stocks.

• Track trends: Use price movement, volume, institutional flow, and news to identify which sectors are gaining strength.

Words of Caution

Sector rotation may sound like a cheat code, but it comes with risk:

• Can increase portfolio volatility

• Doesn’t guarantee profits

• May lag behind broader market returns

• Requires patience, practice, and a clear strategy

Final Thoughts: Ready to Rotate?

If you’re ready to take more control of your portfolio, sector rotation is a strategy worth exploring. While it's not foolproof, it can help you think more strategically about what’s happening in the economy and where your money could be working harder.

Start by studying sector movements, try a few ETFs, and track your results. With time, you’ll start to see the rhythm of the market and learn how to dance with it.

Disclaimer: This newsletter is strictly educational. The information this report provides does not constitute investment, financial, trading, or any other advice. You should not treat any of the report’s content as such. Please be careful and do your research.