1. Another wild day in the markets but the bulls got the upper hand.

Big tech battled back and helped spark a broad-based bounce in the stock market.

Meanwhile, the U.S. dollar has experienced its largest three-day decline of recent history as the wall of cash headed for Europe’s defense industry reshaped the market’s outlook.

It’s hard not to share the enthusiasm, as Germany is finally breaking its fiscal shackles while US growth is slowing and the Trump administration targets lower yields and in turn a weaker dollar.

All in all, we are definitely in a new market narrative that makes the case for the euro to extend its recent gains. But talking about a move toward $1.10 is one thing. Calling a fresh trend that could take us above the 2024 highs around $1.12 looks premature and one-sided.

2. Global economic policy uncertainty is too high.

The “economic policy uncertainty index” based on news articles spiked to the highest on record.

This exceeds the 2020 Crisis peak.

The back-and-forth commentary about tariffs, sanctions, and other tools in the economic/geopolitical battles taking place is impacting certain sectors more than others. As a result, some investors are taking a step back from the markets, hoping to avoid the volatility and hop back in once there’s clarity.

3. Meanwhile, retail investors are still heavily invested in US stocks.

As a matter of fact, U.S. households have the biggest allocation to stocks in history.

Source: JPMorgan

4. A plea for a European D.O.G.E.

“What Europe needs is a DOGE,” Deutsche Telekom CEO Tim Höttges told an audience at the Mobile World Congress in Barcelona.

Höttges made a renewed call for Europe to cut down on barriers to market consolidation in Europe’s telecoms industry and consider charging U.S. tech giants to use mobile carriers’ networks.

5. The debt crisis could cause an “economic heart attack” for US economy in the next 3 years, says Ray Dalio.

In an interview with Bloomberg, Dalio said the US is on the brink of experiencing an "economic heart attack" within the next three years if the administration does not commit to actively reducing the deficit, which now makes up about 7.5% of GDP.

US net interest costs on public debt as a share of federal revenue hit ~19%, matching a RECORD seen in 1992. In other words, ONE-FIFTH of government revenues goes to interest.

Not a subscriber yet?