Can we make a deal with China?... A new bull market... It could be just the start... But don't count out the market's 'boogeyman'... Here comes more inflation data...
Trade talks have restarted...
Early last week, we warned that time was running out on President Donald Trump's broad 90-day tariff "pause."
So far, there has only been one trade deal with the U.K. and a shaky framework agreement with China – which both sides have been accused of breaking.
But on Thursday, Trump had a "very good" phone call with Chinese President Xi Jinping. And earlier today, a delegation of U.S. officials met with their Chinese counterparts in London to discuss a trade deal. The Wall Street Journal has reported that Trump has already given the go-ahead to remove export controls on China.
We'll have to see what comes from the latest round of talks, which are expected to last for two days. But the news is just another sign for investors that things aren't as bad as they appeared in the first days after "Liberation Day."
Stocks were little changed throughout the day – with the S&P 500 Index and Nasdaq Composite Index up slightly and the Dow Jones Industrial Average down slightly.
In the meantime, the S&P 500 has entered a new bull market...
On Friday, the S&P 500 closed 20% higher from its recent April 8 low, officially marking the start of a new bull market.
With stocks rallying, fear has disappeared from the market...
The CNN Fear and Greed Index is now in "greed" territory, recently hitting its highest level since October.
The American Association for Individual Investors ("AAII") survey tells the same story...
The percentage of bears in the AAII survey has fallen to 41% as of June 4. While that's still above the historical average of 31%, it's well below the 60.6% reading we saw during the week of February 26.
The Conference Board Consumer Confidence survey shows that 44% of respondents now see higher stock prices over the next 12 months, up from 38% in the month prior.
This could just be the start...
A lot of stocks have participated in the rally we've seen over the past two months. As our colleague and True Wealth editor Brett Eversole wrote in the DailyWealth newsletter last week...
The advance/decline line for the entire New York Stock Exchange ("NYSE") recently hit a new all-time high. Take a look...
The overall market hasn't hit a new high yet... but most stocks are climbing. That means we're seeing positive market breadth.
Positive breadth – or overall market "health" – is great for the market. When more stocks are in uptrends, the overall market indexes should follow suit. As Brett wrote...
This is fantastic news for investors. It shows that this rally isn't a flash in the pan... It should have legs, which means the market will hit new highs soon.
History also shows that stocks could keep heading higher.
In a post on social platform X, Ryan Detrick, chief market strategist at the Carson Group, showed how markets have performed after entering a new bull market after an "almost" 20% decline or more.
In 16 out of 17 instances dating back to 1948, stocks were higher 12 months later. That's a 94% success rate. The average gain was 18.9% 12 months later.
So there are a few signs showing that the worst could be behind us. But the market's "boogeyman" – inflation – could still have its say...
Companies are hiking prices...
After Trump's April 2 Liberation Day announcement, we said there were a lot of "ifs" and any outcomes – bullish or bearish – were far from certain. But we did warn that we could see high(er) inflation, whether tariffs turned out to be positive or negative for the economy...
The bearish case is that if today's new tariffs lead to more escalation, they could cost businesses additional potential profits and likely lead to more inflation for consumers in the short term, regardless of whatever the longer-term impacts are, positive or negative, on the U.S. economy.
We're starting to see that today...
In a survey from the New York Federal Reserve, three-quarters of businesses polled said they've passed on at least some of the increased costs from tariffs onto customers. Almost 33% of manufacturers and 45% of services companies said that they've raised prices to fully cover the impact of tariffs.
But companies are raising their prices for just about everything. From the New York Fed...
Indeed, roughly half of businesses reported raising prices of goods directly subject to tariffs. Interestingly, a significant share of businesses also reported raising the selling prices of their goods and services unaffected by tariffs.
There's still uncertainty over future trade deals and how tariffs might impact the economy from here. But one thing seems certain... prices are headed higher.
It could show up in this week's inflation data...
On Wednesday, Uncle Sam will release Consumer Price Index ("CPI") data for the month of May.
In April, the "official" inflation data showed the lowest year-over-year growth since February 2021.
But the New York Fed's survey shows that 57% of services businesses and 61% of manufacturers raised prices within a month of tariffs increasing supply-chain costs. So May could be the month we see tariff-related price increases reflected in the data.
The Cleveland Federal Reserve estimates the CPI will see a year-over-year inflation gain of 2.4%, and the core CPI (excluding food and energy) will see a year-over-year increase of 2.8%. That would be a slight uptick from April's 2.3% reading.
Still, Federal Reserve Chair Jerome Powell has stressed for years that the central bank doesn't make decisions on interest rates based on one month's data. So don't expect a rate cut soon – even with a bump in inflation. We'll be back on Wednesday to break down the latest data.
In This Week on Wall Street, Director of Research Matt Weinschenk explains the "perfect storm" brewing for precious metals... reveals why gold may be on the verge of a historic bull run... and shares how everyday investors can position themselves to profit.
Watch this video on our YouTube page, and be sure to subscribe for more of our free video content, like our Stansberry Investor Hour interviews, Diamond's Edge Live, and more.
New 52-week highs (as of 6/6/25): Automatic Data Processing (ADP), Alpha Architect 1-3 Month Box Fund (BOXX), Cisco Systems (CSCO), Cintas (CTAS), Commvault Systems (CVLT), SPDR Euro STOXX 50 Fund (FEZ), Cambria Foreign Shareholder Yield Fund (FYLD), iShares U.S. Aerospace & Defense Fund (ITA), Microsoft (MSFT), Sprott Physical Silver Trust (PSLV), Construction Partners (ROAD), iShares Silver Trust (SLV), Global X Uranium Fund (URA), Visa (V), Vanguard FTSE Europe Fund (VGK), and Industrial Select Sector SPDR Fund (XLI).
In today's mailbag, feedback on Dan Ferris' Friday essay... and we received a few notes from people looking for a replay or a transcript of our founder Porter Stansberry's new presentation that debuted last week. You can watch the full presentation or read a transcript here.
"Hey Dan, every person in America should read your article! Some will wake up and some won't (most politicians and tech loving bubble riders). Loved your comparison of Bitcoin to the Nasdaq on steroids!... Thanks for the Digest; you and Corey do a great job!!!" – Subscriber Larry N.
"Hi Dan: I really appreciate your thoughtful writings on investments to keep us mindful of not getting too carried away by the, shall we say, 'irrational exuberance' of the equity markets.
"Thanks for the order of liquidation as it relates to bankruptcy. I've known since my college days secured creditors (bondholders) are way up the food chain for any payouts but didn't know the order. But let's not conflate the capital structure with the 'word of God' when it comes to bankruptcy. There are many former GM bondholders who on June 1, 2009 had wished that by (human) law that order of liquidation would have been held sacrosanct..." – Subscriber Jim L.
All the best,
Nick Koziol
Baltimore, Maryland
June 9, 2025
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