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1. Wall Street is watching shipping data to gauge tariff impact.

Scrambling to gauge how President Trump’s tariffs are flowing through the global economy, investors are seeking early signs in data from ports, truckers and railroads.

Traders often turn to shipping and logistics data when the outlook gets murky. Transportation stocks are considered a market bellwether because those companies move the goods and raw materials that power the economy.

Ryan Petersen, chief executive of Flexport, a San Francisco-based freight forwarder, said China-to-U.S. bookings have declined 60% since April 9.

“That’s going to have a huge impact on the logistics industry,” Petersen said. “Consumers probably won’t see this until later.”

Source: WSJ

2. Is AI a bubble?

Corporate LLM AI investment is like any other corporate investment. It is the most sensitive element of overall aggregate demand to a recession and to a decline in animal spirits.

In broad terms, corporate investment runs with a beta around 5x that of consumer spending in a downturn.

It is often the tipping point that pushes the economy into a technical recession.

In a boom, corporates will be happy to try out ‘the new new thing’, hyped by the media as an emerging megatrend which will change the world of work forever. But in a downturn, the rose-tinted spectacles come off, survival instincts kick-in and companies only invest in activity that actually makes a return over the cost of capital.

There’s not a lot of LLM AI activity that makes a return, certainly not over the medium term, when the false economies of using LLMs to write code, or summaries, really become apparent.

LLMs need massive user bases to offset costs. Example: To break even, ChatGPT needs ~10x its current revenue.

OpenAI projections imply losses tripling to $14 Billion in 2026.

With 60% of LLM startups expected to fold by 2027 (per Sequoia Capital), the gold rush has a reality check coming.

Source: Macrostrategy

3. The world installed 600 GW of solar power in 2024.

A new report from SolarPower Europe reveals that the world installed a record 597 GW of solar power in 2024 – a 33% surge over 2023. After the world crossed the milestone of 2 terawatts (TW) total solar in late 2024, the annual report predicts the world could be installing 1 TW of solar per year by the end of the decade.

4. Goldman Sachs raises copper price forecast on resilient Chinese demand.

Goldman Sachs hiked its quarterly copper price forecast, citing de-escalation in trade tensions and resilient Chinese copper demand that will likely continue to support prices in the coming months.

"We upgrade our 2Q/3Q price forecast to $9,330/$9,150/t from $8,620/$8,370 previously," the bank said in a note.

In the longer term, the bank says the copper market will move into a supply deficit in 2026, driven by strong demand from electrification-related sectors and limited growth in mining.

This should push prices to more than $10,500 a ton by the end of 2026, it added.

5. The tariff clown show: “We reached a great deal with the UK”.

Under the deal, the UK still faces 10% tariffs on nearly everything from the U.S.

Nevertheless, UK stocks could be an interesting bet this year.

“We see improving risk-reward for the more cyclical and domestic FTSE 250 amid slowing inflation and upcoming Bank of England rate cuts,” say Barclays strategists led by Emmanuel Cau, who have switched to being overweight on the index.

Bearishness toward domestic UK stocks has gone too far and valuations are depressed, while BOE rate cuts could boost demand.

Meanwhile, the strategists note that the FTSE 100 remains defensive, cheap, under-owned, and could continue to benefit from stagflation and recession fears.

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