June 14, 2025
What You Need to Know Today:
Dollar sinks to 3-year low
The dollar sank to its lowest level in more than three years on Thursday. Traders sold the dollar in favor of the yen and the euro, which both climbed by about 1% against the U.S. currency to leave it almost 10% down against the DXY, a basket of currencies of major U.S. trading partners since the beginning of the year. In London, the FTSE 100 ended the day at 8,884 points, above the previous closing high of 8,871 points set on March 3 of 2025, as investors looked for alternatives to U.S. shares.
An important indicator: On Wednesday stocks fell on good tariff and inflation news
Yesterday should have led to a continued rally in U.S. shares. Investors got good inflation news as the all-items Consumer Price Index rose in May at a 2.4% annual rate. That was uo from the 2.3% annual rate in April but still lowerbthan the 2.5% rate expected by economists. The core rate, which excludes energy and food prices climbed at a 2.8% annual rate. That matched the 2.8% annual rate in April, butt was lower than the 2.9% annual rate projected bt economists. And investors got good news on the tariff front as Trump Administration trade negotiators announced the framework for a trade deal with China that would result in increased shipments of rare earth minerals, essential to U.S. technology products in exchange for measures that would ease U.S. restrictions of cutting edge chips to China. The framework would set tariffs on Chinese goods at a still-very-high 55%. On other days, that inflation and tariff news would have extended the recent string of up days for U.S. stocks. But instead on Wednesday the Standard & Poor’s 500 fell 0.3%.
Dollar sinks to 3-year low
The dollar sank to its lowest level in more than three years on Thursday. Traders sold the dollar in favor of the yen and the euro, which both climbed by about 1% against the U.S. currency to leave it almost 10% down against the DXY, a basket of currencies of major U.S. trading partners since the beginning of the year. In London, the FTSE 100 ended the day at 8,884 points, above the previous closing high of 8,871 points set on March 3 of 2025, as investors looked for alternatives to U.S. shares.
Oil prices up today on Middle East tensions, but U.S. oil production is forecast to fall in 2026
According to the U.S. Energy Information Administration’s Short-Term Energy Outlook, released Tuesday, U.S. domestic crude production will decline in 2026 for the first time since 2021.
Now it’s the World Bank cutting growth forecasts
The global economy is projected to slow sharply this year, the World Bank said on Tuesday.
This isn’t good news: Citigroup to raise reserves for bad loans looking to second half weakness
Citigroup (C) announced plans to put aside hundreds of millions of dollars more than it did last quarter into reserves against potential bad loans.
Special Report: 10 Picks from the Rest of the World–today adding a sixth pick
Now you need to own more besides U.S. stocks. But what? With my answer, here’s my Special Report: 10 Picks from the Rest of the World
Live Market Report (20 minute delay)
An important indicator: On Wednesday stocks fell on good tariff and inflation news
Yesterday should have led to a continued rally in U.S. shares. Investors got good inflation news as the all-items Consumer Price Index rose in May at a 2.4% annual rate. That was uo from the 2.3% annual rate in April but still lowerbthan the 2.5% rate expected by economists. The core rate, which excludes energy and food prices climbed at a 2.8% annual rate. That matched the 2.8% annual rate in April, butt was lower than the 2.9% annual rate projected bt economists. And investors got good news on the tariff front as Trump Administration trade negotiators announced the framework for a trade deal with China that would result in increased shipments of rare earth minerals, essential to U.S. technology products in exchange for measures that would ease U.S. restrictions of cutting edge chips to China. The framework would set tariffs on Chinese goods at a still-very-high 55%. On other days, that inflation and tariff news would have extended the recent string of up days for U.S. stocks. But instead on Wednesday the Standard & Poor’s 500 fell 0.3%.
Dollar sinks to 3-year low
The dollar sank to its lowest level in more than three years on Thursday. Traders sold the dollar in favor of the yen and the euro, which both climbed by about 1% against the U.S. currency to leave it almost 10% down against the DXY, a basket of currencies of major U.S. trading partners since the beginning of the year. In London, the FTSE 100 ended the day at 8,884 points, above the previous closing high of 8,871 points set on March 3 of 2025, as investors looked for alternatives to U.S. shares.
Oil prices up today on Middle East tensions, but U.S. oil production is forecast to fall in 2026
According to the U.S. Energy Information Administration’s Short-Term Energy Outlook, released Tuesday, U.S. domestic crude production will decline in 2026 for the first time since 2021.
Now it’s the World Bank cutting growth forecasts
The global economy is projected to slow sharply this year, the World Bank said on Tuesday.
This isn’t good news: Citigroup to raise reserves for bad loans looking to second half weakness
Citigroup (C) announced plans to put aside hundreds of millions of dollars more than it did last quarter into reserves against potential bad loans.
Let’s not forget the other big Magnificent 7 event this week: Tesla’s robotaxi launch in Austin
Tesla’s (TSLA) next major event is the launch of its robotaxi service in Austin, Texas, scheduled for June 12, 2025. This event will mark the debut of Tesla’s autonomous ride-hailing fleet, featuring the new Cybercab vehicle and Full Self-Driving (FSD) technology. The launch IS a pivotal moment for Tesla, coming as it does when the company’s EV sales have faltered and when investors increasingly ask if the company has lost its technology lead to ChineSE companies such as BYD.
Watch the auction of 30-year Treasury bonds this week to see how fast the debt crisis is moving
The U.S. Treasury is set to sell $22 billion of 30-year government bonds on Thursday, part of its regularly scheduled borrowings. In normal times this would be a routine bond auction. But these aren’t normal times. So the auction has taken on the role of an indicator of how fast the U.S. debt “problem” is turning into a crisis–and in particular as a measure of which big institutional investors are shunning the long-end of the Treasuryy market.
Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…
I’d be surprised if we don’t get a week full of the unexpected from China tariff talks to EU tariff talks to the National Guard in the streets of Los Angeles–and more that I can’t begin to anticipate. So Apple’s (AAPL) World Wide Developers Conference stands out as a bulwark of predictability. The likely result will be disappointing to investors. Apple isn’t likely to announce anything that will reverse current sentiment that sees Apple as woefully behind in the AI race. Rather than boosting the stock–down 18.37% for 2025 as of the close on June 6–I think the event will put new downward pressure on the shares.
U.S. labor market shows downward trend but hangs tough in May
In May the U.S. economy added 139,000 jobs. That beat economists’ projections for an addition of 125,000 jobs.
The unemployment rate held steady at 4.2%.
More job cuts–now it’s Procter & Gamble
n May Microsoft (MSFT) announced that it will cut more than 6,000 jobs; today it was Procter & Gamble’s (PG) turn. The company said it will cut up to 7,000 jobs, or approximately 6% of its global workforce, in the next two years as the maker of Tide detergent and Pampers diapers struggles to reduce costs in the face of tariff uncertainty and rising consumer anxiety.
Microsoft cuts more jobs in effort to reduce costs of AI build out
On Monday Microsoft told another 300 employees that their jobs had been eliminated. These cuts come on top of the 6,000 jobs cut in May. As of June 2024, the company had about 228,000 full-time employees, 55% of whom were employed in the United States.
It’s not just the U.S. economy that looks to be slowing
On Tuesday, the Organization for Economic Cooperation and Development slashed its outlook for global output to 2.9% this year, from 3.3% in 2024. Economic growth in the United States is expected to be particularly weak, the organization said, with growth of just 1.6% this year, a drop from the 2.2% projected in March, and projected growth of 1.5% in 2026, down from its previous March estimate of 1.6% growth. The U.S. economy grew 2.8% in 2024.
And now the service sector is weakening too
The Institute for Supply Management’s index of services dropped 1.7 points in May to 49.9, the group said Wednesday. Readings below 50 indicate contraction, and the latest figure was weaker than all but two projections in a Bloomberg survey of economists. The services sector has been a bastion of strength in the economy even as manufacturing activity has falled. Activity at U.S. service companies slipped into contraction territory last month for the first time in nearly a year on an abrupt pullback in demand, while prices accelerated as higher tariffs reverberated across the economy. Business activity stagnated with index at five-year low; orders slumped.
Senate will make bad House spending bill worse
Oh, joy, the Senate is back in session. And it’s hard at work making a bad House spending bill worse.
It doesn’t have to be that way. The Senate could reduce the tax cuts that threw the House bill so sharply into deficit. It could raise more revenue by raising taxes on American millionaires or closing the “carried interest” loophole on hedge funds and other Wall Street investment vehicles. But it won’t. The odds of fiscal sanity breaking out in the Senate as the Republican majority works on its version of the One Big Beautiful Bill are nil. Instead we’re looking at a bill that will be even worse than the House package. There are really only two questions: How much worse will the Senate bill be? And will the House, with its slim Republican majority and its warring factions, be able to pass a version of the Senate bill that will win the approval of that chamber’s bitterly divided Republicans? (As deeply divided as House Republicans but divided along different lines.)
May jobs number expected to show the economy slowing but hanging tough
I think it’s safe to say that the May jobs report due Friday is important. Today, June 3, Economists see payrolls rising by 130,000 after job growth in March and April exceeded projections and the unemployment rate holding steady at 4.2%.
Dollar tumbles again and the decline is projected to continue
After falling on Monday, the dollar resume its decline today. And Wall Street banks project that the drop will continue. Goldman Sachs, for example, called the dollar 15% overvalued. Morgan Stanley said the dollar will tumble to levels last seen during the Covid-19 pandemic by the middle of next year.
U.S. manufacturing activity falls again in May
U.S. factory activity contracted in May for a third consecutive month and the Institute for Supply Management’s (ISM) manufacturing index edged down 0.2 point last month to 48.5. Readings below 50 indicate contraction. The report released on Monday showed tariffs and tariff uncertainty taking a big toll in the sector.The ISM’s import measure dropped 7.2 points, one of the largest monthly slides on record, to 39.9.
Watch my new YouTube video: Quick Pick Pan American Silver
Today’s Quick Pick is Pan American Silver (PAAS). Gold isn’t the only way to hedge against global economic and currency risks–silver is another great option. It’s a precious metal with industrial uses, so it doesn’t soar as high as a first choice financial hedge as gold, but it’s very affordable right now relative to gold. Pan American Silver just reported solid first quarter results: 5 million ounces of silver, 180,000 ounces of gold, $0.47 earnings per share, and $773 million in revenue. Their all-in production costs for silver are $13.94/oz, while silver’s market price is around $33.64/oz-—a nice margin! Gold production costs are $1,485/oz vs. a market price of around $2,343/oz. The stock even pays a small 1.68% dividend. Morningstar thinks the stock is slightly overvalued, but I think the premium is fair given current market risks. Plus, they recently acquired a 44% stake in the high-quality Juanicipio Silver Mine in Mexico, which should boost production. If you’re looking for a hedge beyond gold, silver—and PAAS specifically—-is a smart choice. I’ll be adding PAAS to my Volatility and Jubak Picks portfolios soon.
Saturday Night Quarterback says, For the week ahead expect…
I expect that little by little, optimistic sentiment will continue to leak out of stock prices.
Good PCE inflation report; but tariff, spending uncertainty postpones any Fed rate cut
The Personal Consumption Expenditures Price Index, the inflation measure favored by the Federal Reserve, posted a lower-than-expected increase in April, rising 2.1% from year-ago levels. Economists had forecast that the PCE index would rise 2.2%. The core PCE, the version that subtracts volatile food and energy costs and that is the number really watched by the Fed, increased 2.5% from one year ago, in line with expectations.
Jim’s Stock Alerts
PAASPan American Silver Corp.
TBFProShares Short 20+ Year Treasury ETF
IGOViShares International Treasury Bond ETF
FXYInvesco CurrencyShares Japanese Yen Trust
UUPInvesco DB US Dollar Index Bullish Fund
BABATencent Holdings Limited
TCEHYTencent Holdings Limited
AALAmerican Airlines
FCXFreeport-McMoRan Inc.
AAPLApple Inc.
Download Jim’s eBook for Free
