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1. S&P 500 rebound needs the Fed’s support to keep going.

The blended forward P/E multiple for the S&P 500 is already back to April 2 levels, around 20.5, after briefly falling to its 10-year average of 18.5.

The recent rally in stocks has made them pricey again, leaving no room for a hawkish tone from the FED.

However, the FED did not change the target Federal Funds rates today, largely as expected.

The committee warned uncertainty has increased. New risks for higher unemployment and inflation are dimming the economic outlook.

Fed Chair Jerome Powell took the stage later and said they were still waiting to see what happens next.

Trump’s commentary on the Fed’s work? It’s not something they consider, he said, and it does not affect his job at all!

2. A $2.5 trillion “avalanche” of selling.

Eurizon SLJ Capital chief executive Stephen Jen said the dollar may face a $2.5 trillion “avalanche” of selling as Asian countries unwind their stockpiles, while Barclays strategists said rebalancing away from US stocks may just be getting started.

Meanwhile, the dollar strengthened against most Group-of-10 peers on hopes that US-China trade talks would help ease trade tensions and bolster their economies.

3. US buybacks are supporting the market.

The value of announced buybacks in the US reached $233.8 billion in April, the second-highest monthly tally in records going back to 1984, according to data compiled by Birinyi Associates.

4. “The entire AI ecosystem could implode.”

“There is a straightforward set of economics to running datacentres. H100s cost US$50k to fully install. This means, if you buy one to rent out, to make a 10% return over the cost of capital over a year, assuming the price held and the chip didn’t become redundant before that time, you’d need to rent it out for US$6.27/hour. However, it is currently renting for US$1.15/hour, at which rate you’d make a 72% loss.

Which means that the AI are all at severe risk of haemorrhaging cash and going out of business if they keep building datacentres and buying Nvidia chipsets.

The next, related issue is the credit in the system. Nvidia is US$23bn deep in vendor financing, a 502% increase over 24 months. Given that no one has any commercial motivation to train another LLM, standard inference is getting cheaper, and there are no killer apps, and that datacentres look like horrendous credit risks, the risk is that Nvidia blinks and goes into self-preservation mode, like Cisco did in 2001. At that point, the cycle would end in dramatic fashion.”

Source: Macrostrategy

5. India's appeal for investors is not derailed by conflict with Pakistan.

India's $4 trillion economy has limited direct trade with Pakistan, and even its overnight cross-border missile strikes had little immediate impact on local equity, currency and bond markets, on the view that full-fledged conflict is unlikely.

"If there is a cessation of hostilities like there should be, pragmatically and practically, the investment climate may not actually be harmed," said Ajay Marwaha, head of fixed income at Mumbai-headquartered investment house Nuvama Group.

Previous conflicts have not had a lasting impact on Indian assets, Citibank analysts wrote in a note on Wednesday.

India is expected to remain the fastest-growing major economy with the central bank forecasting GDP growth of 6.5% this financial year. It is also among the best-performing of the world's big stock markets since early April, when Washington announced reciprocal tariffs on its trading partners, with the benchmark Nifty 50 rising 4.6% since then.

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