Authored by Mary Prenon via The Epoch Times,

Inappropriate attire, excessive use of cell phones, poor quality of work, and foul language are just a few of the reasons 65 percent of U.S. hiring managers gave for firing college graduates who had recently started their first job.

A Pollfish survey of 1,000 managers across America, reported by Resume.com, revealed the reasons that eight in 10 managers said newly hired college graduates did not work out during their first year on the job.

Excessive use of cell phones ranked as the top pet peeve of managers, at 78 percent. Some 61 percent of managers found their new hires were entitled or easily offended, while 57 percent noted these new employees were unprepared for the workplace. Lack of a work ethic scored 54 percent, followed by poor communication skills at 48 percent and lack of technical skills at 27 percent.

Other concerns managers had about the graduates included lateness, failure to turn in assignments on time, unprofessional behavior, and inappropriate dress and language. Seventy percent of companies surveyed noted that some hires had to be placed on performance improvement plans.

“Colleges don’t teach students how to behave in the workplace, and there is a lack of transitional support from both universities and employers,” Resume.org’s career coach Irina Pichura stated in the report.

“Most students graduate with little exposure to professional environments, so when they arrive at their first job, they’re often learning basic workplace norms for the first time. Colleges should have a workplace training program to support graduates’ transition to the workplace.”

Clark Lowe, CEO of O'Connor Company, a leading national commercial construction firm, agrees.

“Colleges do a disservice to students in not preparing them for work,” he told The Epoch Times. “Parenting has also been pushed off to the schools, and building of character has been pushed off to the workplace. That’s very frustrating!”

Lowe served as an adjunct professor for Mercy University in Dobbs Ferry, New York, for many years, teaching graduate business courses.

“A lot of professors have no work experience beyond teaching,” he said.

“They grow up in academia and stay there, but all of those degrees and certificates are not going to replace work experience.”

Based in Pinehurst, North Carolina, the O’Connor Company is a remote company with about 60 employees, including skilled construction workers, project managers, and staff in accounting, marketing, and administration. It develops nonresidential structures such as public and educational buildings.

Last year, the company hired 30 new employees and plans to add 10 more this year.

“The latest generation seems to be getting more and more entitled,” Lowe said.

He and his team have also had some problems with recent college graduates, especially those who had never held any type of job.

“In our experience, those people tend to be difficult to work with since the work ethic is not there and they have never learned what it’s like to earn their own paycheck,” he said.

Previous Work Experience Is a Must

Lowe looks for individuals who show initiative and drive and are excited about coming to work. Previous work experience is a must for his firm.

“We don’t care what type of work they did, whether it was in a gas station or retail store,” he said. “What’s important is that jobs teach them responsibility, time management, and a work ethic.”

Only 58 percent of companies responding to the Pollfish survey indicated they plan to hire from the class of 2025, and one in six hiring managers admit they’re hesitant to hire recent graduates at all. Of those managers who are open to hiring new Generation Z graduates, more than 50 percent are seeking qualities such as initiative, a positive attitude, a strong work ethic, adaptability, and openness to feedback.

Pichura also shared advice for recent graduates on how to demonstrate initiative during and after the hiring process.

“During the interview, candidates should come prepared with research and ideas,” she said.

She recommends using real examples, such as stories where the individual stepped up without being asked to solve a problem. She refers to the “Situation, Task, Action, Result” method as the “STAR” method.

Once hired, Pichura noted, a new employee should look for ways to take ownership of tasks, ask for feedback, and go beyond their role.

“Even in an entry-level role, new hires can stand out by looking for small ways to own tasks, solve problems, and offer solutions before being asked,” she said.

“Being reliable, meeting deadlines, and treating every task with care and intention builds trust and credibility early on.”

Authored by Sam Dorman and Matthew Vadum via The Epoch Times,

The Supreme Court on May 15 heard oral arguments in relation to the Trump administration’s request to lift nationwide injunctions placed on the president’s birthright citizenship order.

The decision could determine how judges can address presidential actions.

During the argument, the justices posed questions about how far lower court judges could go in issuing relief from particular policies.

Solicitor General D. John Sauer told the court that nationwide injunctions exceed judges’ authority under Article 3 of the Constitution.

While members of the Supreme Court have criticized nationwide injunctions in the past, they seemed skeptical that it was appropriate to remove the injunctions in this case.

President Donald Trump’s Executive Order 14160, signed on Jan. 20, states that “the Fourteenth Amendment has never been interpreted to extend citizenship universally to everyone born within the United States.”

The executive order has prompted debate over the meaning of the 14th Amendment’s citizenship clause, which states that “all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”

Here are some takeaways from the arguments, as well as considerations surrounding the Supreme Court’s ruling.

1. No Final Ruling Expected on Constitutionality

The argument stemmed from an emergency request made by the Trump administration to limit three separate nationwide injunctions blocking the president’s birthright citizenship order.

At such an early stage in the litigation, the justices wrestled more with procedural considerations such as the scope of relief rather than the constitutionality of birthright citizenship for illegal immigrants.

However, judges can still consider the likelihood that each side will succeed with its arguments about the more substantive issues. The issue could also reach the Supreme Court again after further deliberation in lower courts, teeing up an opportunity for the justices to make a more definitive ruling on birthright citizenship.

Sauer could have asked the Supreme Court to delve deeper into the constitutional issues, but he did not. Justice Amy Coney Barrett pressed him on this point and asked why he wanted there to be more consideration by lower courts before the justices took on the issue.

“So this one isn’t clear-cut on the merits?” she asked.

Justice Ketanji Brown Jackson said that if Trump’s order is legally wrong, allowing the administration to continue implementing it would be inconsistent with the rule of law.

“It seems to me that your argument says we get to keep on doing it until everyone who is potentially harmed by it figures out how to file a lawsuit, hire a lawyer, etc.,” she said. “And I don’t understand how that is remotely consistent with the rule of law.”

Solicitor General nominee, D. John Sauer, prepares to testify during his confirmation hearing before the Senate Judiciary Committee on Capitol Hill on Feb. 26, 2025. Chip Somodevilla/Getty Images

2. Several Judges Critical of Trump’s Order

During the May 15 arguments, Justices Sonia Sotomayor and Elena Kagan seemed to think that the administration had misinterpreted the 14th Amendment when it ordered a halt to illegal immigrants’ children receiving birthright citizenship.

“As far as I see it, this order violates four Supreme Court precedents,” Sotomayor told Sauer.

Later, Kagan suggested to Sauer that the administration would continue to lose in defending its policy before lower courts. She was asking what incentive the government would have to appeal the case to the Supreme Court if another judge had not issued a nationwide injunction.

“If I were in your shoes, there is no way I'd approach the Supreme Court with this case, so you just keep on losing in the lower courts, and what’s supposed to happen to prevent that?” she asked.

3. Dispute Over Courts’ Historical Authority

Justice Clarence Thomas seemed the most sympathetic to Sauer’s position and suggested that nationwide injunctions do not have a solid historical basis.

Sauer had argued that the first nationwide injunction was issued in 1963 and that the court had consistently said relief should be limited to plaintiffs.

“So we survived until the 1960s without universal injunctions?” Thomas asked.

Sotomayor, meanwhile, asked New Jersey Solicitor General Jeremy Feigenbaum, “We’ve had universal injunctions in some form—correct?—since the founding.”

Both justices asked about the history of courts issuing orders known as “bills of peace,” which resolve a dispute for multiple parties. Sauer described the practice as similar to a modern class action and different from a nationwide injunction. Sotomayor disagreed with that comparison.

4. Alternatives to Nationwide Injunctions?

Justice Brett Kavanaugh suggested that class actions, or lawsuits in which multiple plaintiffs sue on behalf of a larger group of plaintiffs, could take the place of nationwide injunctions.

If nationwide injunctions were not available in this case, people could file class actions, which could “solve a large part of the problem in a way that complies with the rules,” the justice said.

Supreme Court Justices Samuel Alito, Clarence Thomas, Brett Kavanaugh, and Chief Justice John Roberts attend inauguration ceremonies in the Rotunda of the U.S. Capitol on Jan. 20, 2025. Chip Somodevilla/Getty Images

Kelsi Corkran, an attorney for immigration advocacy groups, disagreed, saying such an approach is “just channeling the problems through a different mechanism.”

Kagan said the state of New Jersey, a litigant in the case, is arguing that without the availability of nationwide injunctions, it could face “administrative costs and ... workability problems” as a result of possibly inconsistent court rulings being issued in different states on the citizenship question.

This could also lead to a “magnet problem” as “everybody moves to the state where the more favorable rule exists,” Kagan said.

5. Difficulties Involved in Suing Over Birthright Citizenship

Jackson said the government’s proposal to curtail nationwide injunctions would make it more difficult for people to sue to vindicate their rights.

“Your argument seems to turn our justice system ... into a ‘catch me if you can’ kind of regime ... where everybody has to have a lawyer and file a lawsuit in order for the government to stop violating people’s rights,” she said.

Sauer disagreed, saying that given the status quo, “the ‘catch me if you can’ problem operates in the opposite direction where we have the government racing from jurisdiction to jurisdiction, having to sort of clear the table in order to implement a new policy.”

“Many of us have expressed frustration at the way district courts are doing their business,” Kagan said.

The current system encourages forum-shopping, she said, referring to plaintiffs choosing to file a case in a jurisdiction where they think that the judge will be sympathetic to their case.

During the first Trump administration, litigants sought favorable rulings by filing in courts perceived to be friendly in San Francisco, but in the succeeding Biden administration, litigants filed in Texas, Kagan said.

“There is a big problem that is created by that mechanism,” she said.

US stock futures are set for a fifth straight session in the green, as US equity funds benefited from their first inflows since the Liberation Day shock, and with 6000 in the S&P now less than a 100 points away. As of 8:00am, S&P 500 futures were up 0.3% after the index closed up 4.5% for the week on Thursday as the latest economic data spurred speculation the Fed will cut interest rates twice this year. Nasdaq futures gained 0.4% with Mag 7 leading (TSLA (+1.1%), GOOGL (+0.9%), and NVDA (+0.7%) are outperforming). The powerful rally this week has pushed the tech-heavy equity benchmark into overbought territory, while the S&P closed Thursday at the highest level since February. Europe’s benchmark Stoxx 600 gauge also gained, heading for a fifth weekly advance. The dollar weakened for a second session against major peers, while the yen and Swiss franc gained, and the 10-year Treasury yield was lower after declining 10 basis points Thursday as traders priced in more Fed cuts: bond yields are lower, with 2-, 5-, 10-, and 30-year yields down by 3.09bp, 3.7bp, 3.5bp, and 2.6bp respectively. Commodities are mostly lower, led by gold while oil reversed earlier losses. Overnight headlines were largely quiet. Today, we will receive University of Michigan Sentiment survey data, where consensus expects a modest bounce (to 53.5 vs. 52.2 prior).

In premarket trading, Mag 7 stocks are mostly higher with the exception of Meta after an equal-weighted gauge of the group fell over 1% on Thursday (Alphabet +1.5%, Tesla +1.1%, Nvidia +0.9%, Amazon +0.4%, Microsoft little changed, Apple +0.1%, Meta Platforms -0.1%). Charter Communications (CHTR) gains 9.4% after agreeing to merge with Cox Communications in a deal that values Cox at an enterprise value of about $34.5 billion. Vistra (VST) is up 5.1% after it said it executed a definitive agreement to acquire seven modern natural gas generation facilities from Lotus Infrastructure Partners for $1.9 billion. Here are some other notable premarket movers:

• Archer Aviation (ACHR) shares rise 5.7%, adding to gains from Thursday following its announcement that the electric vertical take-off and landing aircraft company had been selected as the ‘Official Air Taxi Provider’ for the LA28 Olympic and Paralympic Games.
• Doximity (DOCS) drops 18% after the healthcare-software company’s full-year forecast disappointed, with analysts pointing to a cautious tone from the management team on the call regarding the outlook for market growth.
• Globant (GLOB) shares sink 28% after the technology services provider cut full-year revenue guidance for 2025 to a level that undershot analysts’ expectations.
• Pentair (PNR) shares rise 2.2% after JPMorgan upgrades the water-treatment company to overweight from neutral on expectations of potential guidance upside.
• Quantum Computing (QUBT) shares are up 9.7% after the quantum optics technology company reported its first-quarter results.
• Rocket Cos. (RKT) gains 4.4% after ValueAct Capital Management LLC reported a 9.9% holding in the mortgage finance company, according to a new 13D filing with the US Securities & Exchange Commission.
• Take-Two (TTWO) falls 2% as the video-game publisher’s full-year forecast for revenue came up short.
• Travere Therapeutics (TVTX) shares drop 17% after the biotech’s application for its kidney disease treatment Filspari (sparsentan) failed to get priority review status from the US FDA and is set to face an advisory panel.

One month after the nevertrump media hyperventilated about the "US exceptionalism" trade dying, US equities are back in favor following the de-escalation of trade tensions between the US and China. Stocks are now trading like last month’s rout never happened, even though uncertainty remains about the effect of tariffs on the US economy and the direction that the global trade war will take in the coming months. Bank of America's Michael Hartnett said weekly US equity inflows resumed at $19.8 billion for the first time since Liberation Day. Meanwhile, stocks haven’t been getting rewarded for earnings beats: firms that topped expectations in the first quarter reports saw their share prices rise by less than usual, according to JPMorgan strategists. Meanwhile, Federal Reserve Bank of Atlanta President Raphael Bostic said he expects the US economy to slow this year but not fall into recession.

“For now, we believe that the path of least resistance is still higher for risky assets,” said Mohit Kumar, chief economist and strategist at Jefferies International. “We would start turning a bit more cautious around June/July when we expect the hard data start weakening.”

Thursday afternoon brought a deluge of 13F filings, which showed hedge funds adding healthcare exposure and cutting tech over the first three months of the year. Michael Burry’s Scion Asset Management liquidated almost its entire listed equity portfolio in the first quarter. Meanwhile, Warren Buffett’s Berkshire Hathaway trimmed its holdings of financials stocks. 

Traders are also watching negotiations around the US budget with its promise of large tax cuts and the potential impact that will have on the fiscal deficit.  

Elsewhere, Japan’s economy shrank for the first time in a year as the surging yen crushed exports, illustrating its vulnerability even before sustaining the impact of Trump’s tariff measures. Paradoxically, the yen gained 0.2% on Friday to trade around 145 per dollar even as Bank of Japan official Toyoaki Nakamura, the most dovish board member, warned against hurrying to raise the benchmark interest rate.

Europe’s benchmark Stoxx 600 gauge also gained, heading for a fifth weekly advance as cooling global trade tensions improve investor sentiment and corporate earnings season comes in better than expected. Health care and food and beverage sectors outperform. Among single stocks Richemont rises after reporting a rise in full year sales. Here are the most notable European movers:

• Richemont shares rise as much as 5.5% after the Swiss firm’s jewelry division saw strong growth thanks to demand for its high-end Cartier and Van Cleef & Arpels brands.
• Orsted shares rise as much as 2.1%, snapping three days of declines, after UBS analysts say the stock is pricing in a “close to worst case” scenario when it comes to a potential halt order on the Danish company’s two US offshore projects.
• 1&1 shares soar after its parent United Internet submitted a partial offer to acquire as much as 9.19% of 1&1 shares, for a cash consideration of €18.5 apiece.
• Tate & Lyle shares gain as much as 3.1%, among the best performers in the Stoxx 600’s food, beverage and tobacco subgroup, after Citi upgrades the stock to buy from neutral, saying the risk/reward “looks attractive.”
• CVC Capital shares climb as much as 5.4%, to the highest in six weeks, after Morgan Stanley upgrades its recommendation on the alternative investment manager to overweight, seeing scope for recovery after recent underperformance.
• Nibe falls as much as 4.1% after Handelsbanken cut its recommendation on the Swedish heat-pump manufacturer to sell from hold, quoting recent strong share performance.
• Eutelsat shares drop as much as 11% after the satellite operator said on earnings call that it’s “far too early” to discuss the European Union’s revenue commitment to its next-generation low-earth orbit satellites, dampening hope of enhanced government support in the near term.
• Rubis shares fall as much as 3.7% after the French energy solutions firm said Nils Christian Bergene will step down as chairman and a member of the supervisory board, a departure that CIC analysts called a surprise.
• Workspace Group shares fall as much as 11% after the landlord to mostly small- and medium-sized London businesses warned rising vacancies in its portfolio will dent profits.
• Future shares decline as much as 9.2% after the UK specialist publisher said its FY25 organic revenue will face a low-single-digit decline, below estimates.
• Tokmanni falls as much as 14%, the most since last July, after the Finnish retail group missed expectations in its first-quarter report.
• Dino Polska drops as much as 7.5%, most since August, as Poland’s food retailer reported slowing like-for-like sales in 1Q, raising concerns about its business model and triggering profit taking after 42% rally YTD.

Earlier in the session, Asian stocks traded in a narrow range as the rally sparked by US-China trade talks continued to cool and earnings from Chinese e-commerce giant Alibaba underwhelmed. The MSCI Asia Pacific Index swung between a gain of as much as 0.3% and loss of 0.2%. NetEase was the biggest contributor to the gains, after the China-based video-game company reported first-quarter results that beat expectations. Meanwhile, Alibaba was among the major drags, after its quarterly revenue missed estimates and cloud business disappointed. Key indexes dropped in mainland China, Hong Kong and India, while benchmarks rose in Australia and Taiwan. Goldman Sachs strategists raised their 3-month and 12-month targets for the MSCI Asia Pacific ex-Japan Index to 610 and 660, respectively, from 570 and 620, expecting “moderately higher” returns for the region thanks to improved earnings growth amid a better-than-expected outcome to US-China trade talks.

In FX, the Bloomberg Dollar Spot Index fell as much as 0.2%, declining for the second straight day; it is on track to end the week 0.1% higher; the yen and Swiss franc among the beneficiaries.  

In rates, the 10-year Treasury yield was lower after declining 10 basis points Thursday as traders added bets on Fed rate cuts; treasuries are richer across the curve with futures adding to Thursday’s gains and 10-year yields dropping back to 4.405% and near 100-DMA. US yields richer by 2bp to 3bp across the curve with spreads broadly within a basis point of Thursday close; in the 10-year sector bunds and gilts outperform Treasuries by 2.5bp and 1.5bp so far on the day.

In commodities, gold fell to extend its weekly loss as demand for haven assets waned. Oil prices declined after Iran’s foreign minister cast doubts on the status of US-Iran nuclear talks.

Looking at today's US data calendar, key events includes April housing starts/building permits, import/export price index, May New York services business activity (8:30am), University of Michigan sentiment (10am) and March TIC flows (4pm). Fed speaker slate includes Daly at 9:40pm

Market Snapshot

• S&P 500 mini +0.3%
• Nasdaq 100 mini +0.3%
• Russell 2000 mini +0.4%
• Stoxx Europe 600 +0.6%
• DAX +0.7%, CAC 40 +0.6%
• 10-year Treasury yield -3 basis points at 4.4%
• VIX -0.2 points at 17.66
• Bloomberg Dollar Index -0.1% at 1228.52
• euro +0.2% at $1.1208
• WTI crude -0.3% at $61.45/barrel

Top Overnight News

• Donald Trump said he’d set tariff rates for US trading partners “over the next two to three weeks.” BBG
• US Deputy Treasury Secretary Faulkender said he is not concerned about persistent increases in prices, while he added that inflation will return to target levels and they are setting the foundation for the US economy to take off in H2.
• The Trump administration plans to put a number of Chinese chipmaking companies (including memory chipmaker ChangXin Memory) on an export blacklist, but some officials want to delay the move to avoid hurting efforts to strike a long-term trade agreement with China. FT
• Hopes faded for Russia-Ukraine talks set to take place today in Istanbul. The focus now shifts to when Trump may meet Vladimir Putin.
• US President Trump says deals from his trip are worth USD 12-13tln, includes deals already announced and some that will be outlined "very shortly". Will be sending out letters to nations for trade deals soon.
• China approves 10 nuclear reactors, putting the country on pace to surpass the US in nuclear power capacity by 2030. Nikkei
• NVDA is seeing to build a research and development center in Shanghai that would help the world’s leading maker of AI processors stay competitive in China, where its sales have slumped due to tightening US export controls. FT
• Japan’s Q1 GDP falls short of expectations, dropping 0.7% on an annualized basis vs. the consensus forecast of -0.3%, with the shortfall driven by weak consumption and higher imports. Nikkei
• Japan has signaled it is prepared to hold out for a better deal with the US over trade tariffs, pushing for full removal of his 25% duty on imports of Japanese cars rather than risk a domestic political backlash. FT
• The Fed’s Raphael Bostic said in a May 14 interview that he expects the US economy to slow this year but not fall into recession, and reiterated that he sees one rate cut in 2025. BBG
• The cost to ship a container of Chinese-made goods to the U.S. is jumping as importers race to pull cargo across the Pacific during a 3 month trade war truce. Freight rates from China to the US west coast have risen about 8% this week as bookings have boomed. Importers rushing to ship Chinese goods to the US during a short reprieve from higher tariffs may boost freighters. The surprise truce is seen causing a surge in transpacific shipping, Bloomberg Intelligence said. BBG, WSJ
• BofA card spending, week to May 10th: -1.3% (1.0% April average), spending has seen a recovery from the Easter slowdown.

Tariffs/Trade

• US President Trump's administration is reportedly split on adding Chinese chip makers to export blacklists as some US officials fear the move could jeopardise trade talks with Beijing, while the Commerce Department has compiled a list of Chinese companies including memory chipmaker ChangXin Memory to add to the 'entity list' although the timing of the move has been complicated by the recent agreement by China and the US to cut tariffs, according to sources cited by the FT.
• US told Vietnam its trade deficit is unsustainable and a major concern amid tariff talks, according to Vietnam state media.
• Mexican President Sheinbaum spoke with Canadian PM Carney regarding the importance of USMCA in strengthening the competitiveness of the three North American countries, while they also discussed the continuity and strengthening of the seasonal agricultural worker program.
• Greenland's Foreign Minister has suggested that she wants to deepen bilateral ties with the EU, highlighting Greenland's mineral resources as an area for collaboration, via Politico.
• Japan has reportedly indicated that it is prepared to hold out for a better deal with the US, pushing for the full removal of the 25% duty on car imports, via FT.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed after the recent soft US data releases spurred Fed rate cut bets, while participants also digested weak data from Japan and earnings reports. ASX 200 was led by strength in miners and outperformance of gold producers after the recent rally in the precious metal. Nikkei 225 initially retreated amid recent currency strength and after GDP data for Q1 showed a steeper-than-expected contraction in Japan's economy, although the index gradually recovered and returned to flat territory as USD/JPY regained some composure and with the weak data effectively narrowing the scope for the BoJ to resume normalisation. Hang Seng and Shanghai Comp declined with sentiment dampened by earnings releases after Alibaba's results underwhelmed which pressured its Chinese blue-chip tech and ecommerce peers such as Tencent, Meituan and JD.com.

Top Asian News

• BoJ Board Member Nakamura said Japan's economy has recovered moderately, but some weakness has been seen, while he added the economy is facing mounting downward pressure due to the implementation of US tariff policies. Nakamura said the momentum for wage hikes has accelerated but could weaken depending on impact of US tariff policies and noted that it is appropriate to keep monetary policy steady for the time being. Furthermore, he said uncertainty over the economic outlook is heightening, so a cautious monetary policy approach is necessary and hiking rates prematurely when growth is slowing could curb consumption and capex.
• Japan's Economy Minister Akazawa said improvements in job and income conditions are likely to underpin moderate economic recovery, while he added must be mindful downside risk to the economy from US trade policy and the hit to consumption and household sentiment from sustained price rises also becoming a downside risk to Japan's economy.

European bourses (STOXX 600 +0.6%) opened modestly firmer across the board, and have traded with an upward bias this morning. European sectors hold a strong positive bias, with only a handful of industries in negative territory. Healthcare takes the top spot, with gains in the sector seemingly broad based. In terms of stock specific stories, Sanofi (+2.2%) gains after it received FDA orphan designation for treating sickle cell disease. Bayer (+3.5%) benefits from an FT report which suggested it is seeking a Roundup settlement.

Top European News

• ECB's Villeroy says "we are not currently in a currency wars situation but rather a trade war situation".
• ECB's Kazaks says a meeting by meeting approach at the ECB is right and notes a lot of uncertainty around trade measures, according to CNBC.

FX

• Dollar is on the backfoot, continuing the pressure seen following Thursday’s disappointing Retail Sales and softer-than-expected PPI data. As a reminder, this led money markets to fully price in two Fed cuts by year-end; currently pricing in roughly 57bps. DXY currently sits in a 100.52-78 range. Further downside for the index will see a potential test of the week’s trough at 100.27 – should that be taken out, 100.00 will be next in focus. Ahead, US Import Prices, UoM Survey and commentary from Fed's Barkin.
• EUR is modestly firmer vs the Dollar, with specific for the Bloc very light today – Final Italian inflation metrics were revised marginally lower but ultimately had little impact on the Single-Currency. Commentary via ECB’s Kazaks and Villeroy this morning has not added too much to the agenda; the former reiterated the need for a meeting-by-meeting approach and highlighted the uncertainty around trade. This morning EUR has climbed back above the 1.12 mark and has traded in a busy 1.1182-1.1219 range.
• JPY is slightly firmer vs the Dollar after choppy price action overnight, which saw USD/JPY initially trickle lower amid initial haven flows into the yen and recent declines in US yields, but later bounced off support at the 145.00 level. USD/JPY was little moved following weaker-than-expected GDP data. USD/JPY currently trading around 145.30 in a 144.93-145.68 range
• GBP is flat/incrementally firmer vs the Dollar and holds just above the 1.33 mark, in a very thin 1.3300-1.3320 range. UK-specific updates have been lacking today. Some focus has been on an FT article which suggested that EU leaders are urging UK PM Starmer to improve the region’s mobility deal – particularly for EU students.
• Antipodeans are the best performers vs the Dollar, nursing some of the losses seen in the prior session. The Kiwi is the best G10 performer today; overnight, New Zealand 1yr and 2yr inflation expectations are both seen higher, which may explain some of the outperformance in today’s session. Do note that the NZD is outmuscling the AUD in the AUD/NZD cross; some traders may be focused on next week’s RBA meeting, where markets widely expect the Bank to deliver a 25bps cut.
• PBoC set USD/CNY mid-point at 7.1938 vs exp. 7.2085 (Prev. 7.1963).

Fixed Income

• Firmer start to the day as USTs continue the data-induced upside from Thursday with newsflow since a little light and markets largely awaiting updates on numerous geopolitical situations. At the top-end of a 110-10 to 110-20 band. As it stands, on track to end the week almost flat, opened the week at 110-18, despite the marked pressure seen in the first half on US-China progress. Trade developments that sparked notable hawkish action Monday through Wednesday, before being offset by Thursday’s data deluge. Ahead, the docket is comparably light but does feature Building Permits/Housing Starts, Import Prices (factor into PCE) and the prelim. Uni. of Michigan series for May.
• Bunds are in-fitting with USTs, but with action slightly more pronounced as EGBs experienced a marginal rally early doors as European players entered the fray and reacted to the bullish bias of APAC trade. Specifics light. A few ECB officials on the wire but nothing that has fundamentally shifted the narrative. Bunds just off highs in a 130.11-50 confine and, as with USTs, near-enough on track to end the week flat despite a WTD range in excess of 135 ticks.
• Gilts are outperforming slightly, likely on account of the marginal underperformance vs Bunds seen at points this week and as such, the UK is catching up on the final session of the week. As above, Gilts are also set to end the week essentially unchanged, currently just off highs in a 91.84-92.00 band. Resistance at 92.59 from mid-April and thereafter 93.00 before highs from the last few weeks, beginning at 93.59.

Commodities

• A hesitant start for WTI and Brent as geopolitics dominates ahead of the weekend. WTI and Brent traded largely flat through the morning but are currently down by around USD 0.10/bbl, nearing overnight lows.
• In terms of Iran-related headlines, crude prices whipsawed on conflicting media reports yesterday and mixed signals from US and Iranian officials. This morning, Iran's Foreign Minister stated that negotiations will continue as long as the other party remains engaged, maintaining that no formal proposal from the US has been received.
• On Russia-Ukraine, talks are underway in Istanbul, with the Trilateral meeting between Turkey-US-Ukraine supposedly concluded. We are yet to hear the readout from it. Ahead, there will be another trilateral meeting, this time with Russia taking the place of the US.
• Spot gold is continuing losses, pulling back from yesterday’s gains after soft data, lower yields and Fed rate cut bets aided the yellow metal. At the time of writing, the yellow metal trades towards the upper end of a USD 3,205.49-3,252.17/oz range.
• Base metals are softer after the subdued mood in its largest buyer, China, overshadows the positive sentiment in Europe this morning. 3M LME Copper currently rests within, but at the lower-end of, a USD 9,474.9-9,591.42/t range.
• Shanghai Copper warehouse stocks +27.44k/T (prev. -8.60k/T), Aluminium stocks -13.59k/T (prev. -6.19k/T)
• ADNOC Chief says the UAE and the US plan investment of USD 440bln in the energy sector through 2035.

Geopolitics

• US President Trump says he is willing to meet with Ukrainian President Zelensky and Russian President Putin as soon as arrangements can be made; going to take care of Gaza; will make good progress on geopolitical situations in the next two or three weeks In one way or another, will take care of Iran.
• Iranian Foreign Minister says the nation's position is clear and we are ready to build confidence and adopt transparency in our Nuclear Programme in exchange for the lift of sanctions. Not received any agreement proposal from the US; is possible will be informed via a meditator
• Hamas is reportedly holding direct negotiations with the US Administration, according to a senior Hamas official cited by Al Arabiya.

US Event Calendar

• 8:30 am: Apr Housing Starts, est. 1363.5k, prior 1324k
• 8:30 am: Apr P Building Permits, est. 1450k, prior 1467k
• 8:30 am: Apr Import Price Index MoM, est. -0.3%, prior -0.1%
• 10:00 am: May P U. of Mich. Sentiment, est. 53.5, prior 52.2
• 4:00 pm: Mar Net Long-term TIC Flows, prior 112b
• 4:00 pm: Mar Total Net TIC Flows, prior 284.7b

Central Banks

• May 16: Fed’s Barkin Gives Commencement Speech
• May 17: Fed’s Daly Gives Commencement Address

DB's Jim Reid concludes the overnight wrap

Markets continued to advance over the last 24 hours, as weak US inflation data and lower oil prices raised expectations that the Fed would still cut rates this year. By the close, that meant the S&P 500 (+0.41%) had posted a 4th consecutive gain, which now brings its advance since the April low to +18.75%. In fact, the index isn’t far away from a +20% gain that would mark the technical definition of a bull market, and futures this morning are pointing to another modest gain. So it’s been an astonishing turnaround from where we were just over a month ago at the height of the tariff uncertainty.

There were several factors driving the rally, but a critically important one was the US PPI data for April. It showed inflation pressures were much softer than expected, with headline PPI down -0.5% on the month (vs. +0.2% expected). So that marked the biggest monthly decline in producer prices since April 2020 and the Covid lockdowns, and it pushed the year-on-year reading down to +2.4% (vs. +2.5% expected). Core PPI was also softer than expected, with the measure excluding food energy and trade down -0.1% on the month (vs. +0.3% expected), which was the first negative print since April 2020. It also helped broader inflation expectations to move lower, and the US 10yr inflation swap fell -4.7bps on the day to 2.50%, marking its biggest decline in over a month.

With investors feeling less concerned about inflation, they then dialled up their expectations for Fed rate cuts in response. For instance, the amount priced in by December up +7.1bps on the day to 56bps. And in turn, that contributed to a large rally in Treasury yields across the curve, with the 2yr yield (-9.0bps) falling back to 3.96%, whilst the 10yr yield (-10.5bps) fell to 4.43%.

Those moves got further momentum from the latest decline in oil prices, which added to the sense that inflationary pressures were easing. The move followed comments from President Trump, who said “I think we’re getting close to maybe doing a deal” with Iran. Moreover, Trump posted an NBC news story citing a top Iranian official that Iran would sign a nuclear deal in exchange for lifting economic sanctions. So the newsflow led to growing expectations that oil supply could rise, and Brent crude fell another -2.36% on the day to $64.53/bbl.

The fall in yields came despite comments from Fed Chair Powell yesterday, who indicated that the Fed were reconsidering the language on average inflation targeting in their latest review. For reference, in 2020 they changed their approach to permit a period of inflation above the 2% target, if it followed a period of inflation running beneath target, so that was a significant shift. However, the potential to move back off that again was seen in a hawkish light, as it implied less tolerance for higher inflation in the future, and Treasury yields briefly spiked as the headlines came through.

Nevertheless, the Powell comments weren’t enough to counteract the broader rally, and there was also relief yesterday that the US data continued to point away from a recession. For instance, the weekly initial jobless claims remained at 229k over the week ending May 10 (vs. 228k expected), so still in their recent range and not signalling a sharper deterioration. In the meantime, the retail sales data showed modest growth of +0.1% in April (vs. unch expected), which was a slowdown from March, but still not the contractionary territory that might be expected in an outright recession. And with the latest data in hand, the Atlanta Fed’s GDPNow estimate for Q2 moved up to an annualised +2.5% pace.

That environment proved to be a strong one for equities on both sides of the Atlantic, with the S&P 500 up +0.41% on the day. The advance was reasonably broad-based, with 75% of the index moving higher. Defensive sectors outperformed, with utilities (+2.12%) and consumer staples (+2.00%) leading the gains for the S&P 500. By contrast, the Magnificent 7 (-1.09%) ended a run of 5 consecutive gains. Within the Mag-7, Meta fell -2.35% following a WSJ report that it was delaying the rollout of a flagship AI model. In terms of other individual moves, Walmart (-0.50%) lost ground after their earnings, and they warned that prices would go up as a result of the tariffs. And Cisco Systems gained +4.85% following their own earnings after the previous day’s close.

Earlier in Europe, bond markets had also rallied on hopes for weaker inflation, and yields on 10yr bunds (-7.7bps), OATs (-8.5bps) and gilts (-5.2bps) all moved lower. There were similar gains for equities, with the STOXX 600 (+0.56%) closing at a 7-week high, alongside a fresh record for the DAX (+0.72%). That positivity was reinforced by strong UK GDP numbers, with Q1 growth running at a quarterly +0.7% pace (vs. +0.6% expected), and the FTSE 100 (+0.57%) closed above its Liberation Day level for the first time.

Overnight in Asia however, the tone has generally been more negative, with several of the major indices losing ground. Sentiment hasn’t been helped by Japan’s Q1 GDP reading, which showed a larger-than-expected contraction, with the economy shrinking at an annualised -0.7% pace in Q1 (vs. -0.3% expected). So that raised fears about how resilient the economy was, particularly given those numbers were before the Liberation Day announcement in April. Against that backdrop, Japan’s Nikkei fell -0.28%, and elsewhere there’ve been losses for the Hang Seng (-0.76%), the CSI 300 (-0.57%) and the Shanghai Comp (-0.52%). That said, there have been some gains, including South Korea’s KOSPI (+0.19%), and Australia’s S&P/ASX 200 (+0.57%).

Looking forward, the planned US budget reconciliation bill will remain in focus today. Politico reported yesterday evening that today’s planned procedural vote in the House Budget Committee may be in peril due to opposition from fiscally hawkish Republicans to the CBO’s scoring of the bill, and proposed delays to Medicaid cuts. Yesterday our US economists published a report (see here) analysing the details of the tax bill released this week, which they see putting the US on course for a 6.5% of GDP fiscal deficit in the coming years.

In geopolitics, it’s also worth keeping an eye on today’s talks between Russian and Ukrainian officials in Istanbul. These mark the first direct talks since spring 2022, but with Moscow sending a relatively low-level delegation, no immediate progress is expected. Trump claimed yesterday that “nothing’s going to happen” in terms of resolving the war in Ukraine until he and Putin meet.

To the rest of the day ahead, data releases include the University of Michigan’s preliminary consumer sentiment index for May, along with April’s building permits, housing starts, and the import and export price indices. In the Euro Area, we’ll get the March trade balance. And from central banks, speakers include the Fed’s Barkin, the ECB’s Lane, and the BOE’s Lombardelli.

Camp Century, part of a secret Pentagon plan called Project Iceworm, was designed in the late 1950s as a hidden network of nuclear missile launch sites beneath Greenland’s ice. Built in 1959 and abandoned by 1967 due to unstable ice, the facility was meant to store 600 medium-range ballistic missiles.

Today, it lies buried under at least 100 feet of ice, according to the Wall Street Journal, who wrote a lengthy piece on the sites this week.

Photos: WSJ

Although presented as a research station, its real military purpose remained classified until 1996. Nina Erofeeva explained: "The first [licenses] have been received for the creation of oil storage facilities, in the Krasnoyarsk territory. This was also an unusual case. Russia has never had oil storage facilities. Oil has always been pumped through pipelines. Given recent events and the lack of infrastructure in the Arctic zone, oil storage facilities are needed in several regions. Accordingly, oil will be placed in these oil storage facilities so as not to burn it during pilot development."

With 21 tunnels stretching nearly two miles under the ice, the base housed around 200 personnel and operated on nuclear power. Robert Weiss, a physician stationed there in the early 1960s, recalled: “We did realize that it was important; that the Russians could come over the top of the Pole.”

Life at Camp Century was harsh but bearable. “When I got there, it was blowing snow and minus 50 degrees,” Weiss said, remembering how he spent weeks underground. “It wasn’t very hard living from that standpoint.” Joking about the isolation, he added: “We used to say that there was a pretty girl behind every tree. Of course, there was one problem: There were no trees.”

Photos: WSJ

The Journal writes that the base’s full scale wasn’t revealed until April last year, when NASA’s cryospheric scientist, Greene, captured the first complete images using advanced ice-penetrating radar. “You see how the buildings and tunnels were connected, how people had to move about in their day-to-day life, and think what a wild experience it must have been to be stationed there,” Greene said.

The U.S. presence in Greenland has long been controversial. During the Cold War, the U.S. operated 17 bases there and stationed about 10,000 troops. Today, fewer than 200 remain at Pituffik Space Base.

Tensions rose again when President Trump openly criticized Denmark for not securing Greenland and even suggested taking the island by force for U.S. security. Denmark reminded Washington of the 1951 treaty that already allows U.S. bases there but firmly rejected any takeover.

Photos: WSJ

Denmark’s uneasy compromise with U.S. military interests goes back to World War II. In 1941, a Danish envoy in Washington handed control of Greenland’s defense to the U.S. without Copenhagen’s consent. After the war, the U.S. offered to buy Greenland for $100 million, but Denmark refused.

“In the 1940s Denmark learned that if you say no to the U.S., the U.S. will go ahead anyway,” said Ulrik Pram Gad of the Danish Institute for International Studies. “Denmark has been allowed to maintain sovereignty over Greenland by outsourcing some of it—security—to the U.S.”

The U.S.’s undisclosed storage of nuclear weapons in Greenland and a 1968 crash of a nuclear-armed B-52 near Thule Air Base caused long-lasting tensions. More recently, reports of increased U.S. espionage and Trump’s interest in buying Greenland have pushed Greenlanders closer to Denmark.

The global population is undergoing a major demographic shift.

As fertility rates fall and life expectancy rises, average ages are climbing in nearly every country, while population growth is steadily tapering off.

This infographic, via Visual Capitalist's Niccolo Conte, visualizes global population growth and average age from 1980 to 2100, based on data from the IMF’s World Economic Outlook, April 2025 edition.

How the World Will Age as Population Growth Falls

As of 2025, the average person is 33.6 years old, up from 26.5 years in 1980. Over that same period, global population growth has slowed from 1.8% to 0.9% in 2025.

This trend is expected to continue through the end of the century, as shown in the table below, which breaks down the projected average age and population growth rate from 1980 to 2100:

Year Average population growth (%) Average population age (years) Lower range of expected population growth (%) Upper range of expected population growth (%) 1980 1.8% 26.5 0.9% 2.9% 1985 1.8% 26.9 0.8% 2.9% 1990 1.8% 27.3 0.8% 2.8% 1995 1.5% 28.0 0.5% 2.6% 2000 1.4% 28.9 0.6% 2.4% 2005 1.3% 29.8 0.5% 2.4% 2010 1.3% 30.7 0.4% 2.4% 2015 1.2% 31.6 0.3% 2.4% 2020 1.0% 32.5 0.2% 2.0% 2025 0.9% 33.6 0.1% 1.9% 2030 0.8% 34.7 0.0% 1.7% 2035 0.7% 35.7 -0.1% 1.6% 2040 0.6% 36.6 -0.2% 1.4% 2045 0.5% 37.4 -0.2% 1.3% 2050 0.4% 38.1 -0.3% 1.1% 2055 0.3% 38.8 -0.4% 1.0% 2060 0.3% 39.5 -0.4% 0.9% 2065 0.2% 40.1 -0.5% 0.8% 2070 0.2% 40.7 -0.5% 0.7% 2075 0.1% 41.2 -0.6% 0.6% 2080 0.0% 41.6 -0.6% 0.5% 2085 0.0% 42.0 -0.6% 0.4% 2090 -0.1% 42.5 -0.6% 0.3% 2095 -0.1% 42.9 -0.6% 0.2% 2100 -0.1% 43.2 -0.7% 0.2%

The global population is projected to begin declining in 2085, as the average age rises to 42 years. By the year 2100, the average person is expected to be 43 years old, with population growth at -0.1%.

However, the trend is divided across countries. Advanced economies like Japan, Germany, and Italy are aging rapidly and seeing population declines. Meanwhile, emerging economies like India still have growing populations, but the growth is slowing down.

The gradual decline is largely due to falling fertility rates globally, along with improvements in healthcare and life expectancy resulting in larger senior populations.

The Impacts of an Aging Population

Many economies are reaching their demographic turning points—when the share of the working-age population in their total population begins declining.

European countries like Germany, France, and Italy crossed this mark pre-2000, and are now among the world’s “super-aged societies”. The United States, the U.K., and China have followed in the last two decades.

But what does this mean for economic growth and the global economy?

Population aging carries several economic challenges. These include shrinking labor forces, slower productivity growth, and increased fiscal pressure on pension and healthcare systems.

However, there is a silver lining: the IMF notes that while people are living longer, they’re also aging more healthfully. This could result in longer working lives and enhance productivity among older workers, potentially easing the economic impacts of an aging population.

If you enjoyed this infographic, check out A Visual Breakdown of Where Economic Power Lies in 2025, on the Voronoi app.

High-powered lidar systems—commonly used in autonomous and semi-autonomous vehicles—emit infrared laser beams to map their environments. While invisible to the human eye, these beams can damage smartphone camera sensors, as one Reddit user recently discovered the hard way. 

Reddit user Jeguetelli recently shared a video on the r/Volvo subreddit showing a smartphone camera's image sensor being fried after filming the front-mounted lidar sensor on the Volvo EX90—a fully electric, seven-seat luxury SUV that serves as Volvo's flagship entry into the electric vehicle market.

"Never film the new Ex90 because you will break your cell camera.Lidar lasers burn your camera," Jeguetelli wrote. 

Auto blog The Drive pointed out, "It should be said that the risk here is inherent to lidar technology, and has nothing to do with Volvo's specific implementation on the EX90. In fact, earlier this year, the automaker even issued a warning against directing external cameras at the vehicle's lidar pod for the very reasons discussed."

Filming this car's lidar system breaks the phone camerapic.twitter.com/99rfffYS1l

— Interesting things (@awkwardgoogle) May 14, 2025

Volvo's website states:

Lidar light waves can damage external cameras: Do not point a camera directly at the lidar. The lidar, being a laser based system, uses infrared light waves that may cause damage to certain camera devices. This can include smartphones or phones equipped with a camera.

"Would this damage your car's backup camera, if a LIDAR equipped car tailgates you?" one Redditor asked. 

Another person said, "Thank god for Apple Care." 

The ongoing debate in the tech world centers on LiDAR vs. cameras—a big divide in the race toward fully autonomous vehicles, especially when comparing Tesla's camera-only approach to rivals embracing LiDAR.

Elon Musk famously called LiDAR a "crutch," arguing that camera vision powered by advanced AI is sufficient for FSD.

"In my view, it's a crutch that will drive companies to a local maximum that they will find very hard to get out of." Musk said several years ago, adding, "Perhaps I am wrong, and I will look like a fool. But I am quite certain that I am not."

The Counterargument: Tesla's competitors argue that LiDAR provides critical redundancy and reliability, especially for safety-critical applications like robotaxis.

The proliferation of LiDAR sensors on vehicles should come with a public service warning: avoid pointing smartphone cameras at these devices emitting infrared laser beams—they can permanently damage image sensors.

Also, will LiDAR risk burning camera sensors on Tesla vehicles? 

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

The Department of Justice urged the Supreme Court on May 13 to let the Department of Government Efficiency (DOGE) have access to Social Security data after lower courts blocked that access.

The U.S. Supreme Court in Washington on April 3, 2025. Madalina Vasiliu/The Epoch Times

President Donald Trump issued Executive Order 14158 on Jan. 20, implementing DOGE, an advisory body that recommends cost-cutting measures. The order directed the entity to “implement the President’s DOGE Agenda, by modernizing Federal technology and software to maximize governmental efficiency and productivity.”

Solicitor General D. John Sauer argued in the new filing that the lower courts have overreached and are attempting to turn themselves into “the human resources department for the Executive Branch.”

The filing came after Ellen Lipton Hollander, a Maryland-based federal district court judge, issued an order on March 20 preventing DOGE from viewing Social Security Administration (SSA) records because such access “violates” the federal Privacy Act.

The lawsuit was brought in February by labor unions and retirees represented by the Democracy Forward Foundation.

“The DOGE Team is essentially engaged in a fishing expedition at SSA, in search of a fraud epidemic, based on little more than suspicion. It has launched a search for the proverbial needle in the haystack, without any concrete knowledge that the needle is actually in the haystack,” the judge wrote in granting a temporary restraining order against the federal government.

DOGE’s team at the Social Security Administration has had “unbridled access to the personal and private data of millions of Americans, including but not limited to Social Security numbers, medical records, mental health records, hospitalization records, drivers’ license numbers, bank and credit card information, tax information, income history, work history, birth and marriage certificates, and home and work addresses,” Hollander wrote.

Hollander directed DOGE to delete any personally identifiable data in its possession. On April 17, Hollander upgraded the temporary restraining order to a preliminary injunction.

On April 30, the U.S. Court of Appeals for the Fourth Circuit voted 9–6 to maintain Hollander’s order while the appeal process continues.

On May 2, the Trump administration filed an emergency appeal with the Supreme Court, asking the justices to pause the preliminary injunction.

In the May 13 filing, Sauer argued that the district court erred in preventing “the 11 members of the Social Security Administration (SSA) DOGE team—from accessing data ... for purposes that are unquestionably lawful.”

The district court “dictated to the Executive Branch which government employees can access which data and even prescribed necessary training, background checks, and paperwork for data access,” Sauer wrote.

“When district courts attempt to transform themselves into the human resources department for the Executive Branch, the irreparable harm to the government is clear,” he wrote.

When the courts “stymie the government’s initiatives to modernize badly outdated systems and combat rampant fraud—leaving those initiatives on a litigation track that may halt them for months or years—the irreparable harm is even clearer.”

Reviewing Social Security Administration data is important because the agency has “one of the largest documented histories of improper payments,” Sauer stated.

In a brief in opposition filed on May 12, the lead respondent, the American Federation of State, County, and Municipal Employees, said that after years of honoring “its data security obligations,” the Social Security Administration “now seeks to throw open its data systems to unauthorized (and often unvetted) personnel who have no demonstrated need for the personally identifiable information ... they seek.”

The April 17 preliminary injunction should be left in place because it is “narrow and, contrary to the government’s assertions, permits SSA to disclose both anonymized and non-anonymized data to DOGE Team members,” the brief said.

The Supreme Court could rule on the government’s emergency application at any time.

Jack Phillips contributed to this report.

By Benjamin Picton, Rabobank Senior Macro Strategist

Patience To See

Tech names drove the NASDAQ and S&P500 to further gains yesterday, while the Dow Jones fell for a second-straight session. Semiconductors performed especially well as fund managers caught underweight high-beta US megacaps continued a buying spree that was sparked by a 90-day tariff reduction between the US and China announced on Monday. Nvidia posted a 4.16% gain and AMD was up 4.68% as both companies inked deals with Saudi Arabia to sell more chips for AI applications. European stocks underperformed with most major indexes closing lower, and the Nikkei fell as funds flowed back into Hong Kong’s Hang Seng index and China’s CSI300.

While stocks were rising, US 10-year bond yields poked back above the psychological 4.50% level to close the day up 6bps at 4.54%. 30-year Treasury yields closed half a bip below the intraday highs at 4.98%, which means that yields on both the 10-year and the 30-year are now trading above the levels that were in effect on April 9th when the Trump administration apparently cried “uncle!” in response to bond market pressure and kicked the implementation of reciprocal tariffs into the long grass for 90 days.

Perhaps we are about to find out whether it really was rising bond yields that forced the about face on those reciprocal tariffs, or if Scott Bessent has some other rabbit to pull out of his hat to force long yields lower. Rising bond yields is a problem for America’s chief bond salesman who has trillions of Dollars’ worth of debt to refinance in the months ahead. With the Fed still engaged in quantitative tightening, and enormous budget deficits still being run (despite DOGE), Bessent is going to have to work hard to sniff out other bids, and US homebuyers better hope that he can convince offshore investors that Treasuries yielding 4.5-5% are just too juicy to last. One wonders how durable the rally in long-duration tech can be while yields on long bonds are making new highs.

Fed Speakers yesterday offered no help to the Treasury Secretary by giving the impression that there is no rush to cut the Fed Funds rate any further. Mary Daly said that the Fed had to have “patience to see, not to guess”, which seems to discount the possibility of any kind of pre-emptive policy action. Daly also said that if you take a step back from all the tariff uncertainty the underlying economy is experiencing solid growth, with a strong labor market and declining inflation. That assessment might be a little bit like saying that the Dinosaurs were in really good shape if you ignore the uncertain effects of the approaching meteor. 

In the land of hard data, the US economy shrank in Q1 because of a surge in imports that could be replicated in Q2 as the 90-day reprieve on China tariffs encourages importers and retailers to “reload the gun” on goods inventories. Two consecutive quarters of negative growth is the definition of a recession, but get ready for plenty of commentators to suggest that this one doesn’t really count (it wouldn’t be the first time!).

Meanwhile, President Trump continues his dealmaking tour of the Middle East where Qatar has now reportedly agreed to purchase as many as 210 new jets from Boeing. This comes off the back of the semiconductor, energy and military hardware deals signed in Saudi Arabia, Trump’s announcement that sanctions on Syria will be lifted and his meeting with the new Syrian President, who he urged to normalize relations with Israel.

It’s worth pointing out that while the markets were mostly focused on deals to sell more US chips and US energy, there were also announcements of new sanctions on companies facilitating the sale of Iranian oil to China and a new guidance issued by the Commerce Department that the use of Huawei’s Ascend AI chips “anywhere in the world” constituted a violation of US export controls. 

As this Daily noted yesterday, 90-day tariff reduction notwithstanding, what is happening in the Middle East and with trade more broadly should serve as a signal that geopolitical competition between the United States and China isn’t going away.

Headline industrial production held steady in April, driven by utilities production, while manufacturing production declined 0.4% due to decreased production of vehicles and nondurable goods.

Source: Bloomberg

The 0.4% decrease in manufacturing production (followed an upwardly revised 0.4% gain a month earlier) was the first decline since October 2024 and worse than the expected 0.3% decline...

Source: Bloomberg

However, as the chart above shows, despite the decline, upward revisions raised production by 1.2% YoY - the biggest rise since Oct 2022 (tariff-front-running?).

Output at utilities increased, while mining and energy extraction dropped.

The decrease in April factory output reflected declining production of motor vehicles, computers and apparel.

The Fed’s report showed capacity utilization at factories, a measure of potential output being used, fell to 76.8%.

Does April's decline mean we reached peak tariff-front-running? And will that drag down 'hard' data?

Update(10:30ET): With President Trump and his envoy having arrived in the United Arab Emirates (UAE) for the last leg of the president's Gulf tour, new details of behind the scenes US-Iran negotiations have come to light on Thursday.

In a huge first, the Trump White House has sent Iran a written proposal toward forging a new nuclear deal. White House envoy Steve Witkoff has led several rounds of talks, and Axios has revealed that the communication was issued to Tehran last Sunday.

"Iranian Foreign Minister Abbas Araghchi took the proposal back to Tehran for consultations with Supreme Leader Ali Khamenei, President Masoud Pezeshkian and other top officials," writes Axios.

Via Associated Press

It was the Iranian side which initiated the swap of written proposals first, as the talks which have been on since April went from 'indirect' to more 'direct':

• During the third round of talks in late April, Araghchi gave Witkoff an updated document with Iranian ideas for a nuclear deal. This time, Witkoff took the document.
• A U.S. team of experts studied it and sent the Iranians a list of questions and requests for clarification. The Iranians replied and added questions of their own, two sources said.
• Meanwhile, Witkoff and his team prepared a U.S. proposal laying out the Trump administration's parameters for an Iranian civilian nuclear program and requirements for monitoring and verification, the sources said.

It appears that thus far both sides have received the other's written proposals positively, and that's what was driving President Trump's "olive branch" comments on Tuesday. He had stressed while speaking in Saudi Arabia that "this is not an offer that will last forever. The time is right now for them to choose."

President Trump followed up on Thursday by saying from Qatar,  "We're in very serious negotiations with Iran for long-term peace," according to AFP.

He said, "We're getting close to maybe doing a deal without having to do this... there (are) two steps to doing this, there is a very, very nice step and there is the violent step, but I don't want to do it the second."

Trump's comments followed an NBC News interview with Ali Shamkhani, a top political, military and nuclear adviser to Iranian Supreme Leader Ayatollah Ali Khamenei, who said Tehran is prepared to sign a nuclear deal—provided key conditions are met—in exchange for the lifting of U.S. economic sanctions. 

Trump reposted the NBC article indicating Iran is ready to reach a deal (though the details of that deal suggest it would look essentially identical to the JCPOA). pic.twitter.com/LPDLzqu0nd

— Gregory Brew (@gbrew24) May 15, 2025

NBC News pointed out that Shamkhani's comments "appear to be the clearest public statement yet on Iran's expectations and willingness to reach a deal from the supreme leader's inner circle." 

And the fact that written proposals have already been exchanged is yet further confirmation of this positive trend towards peace. Trump has emphasized that Iran can never have a nuclear bomb, but Tehran itself has long said it's not pursuing a nuke, and that its program is only for peaceful domestic energy purposes.

* * *

Brent crude prices fell on Thursday as geopolitical risk premiums eased following President Trump's comments during his Gulf tour, where he signaled that the U.S. is nearing a nuclear deal with Iran. Unlike earlier headlines on AI, defense, and aviation deals with Saudi Arabia and Qatar, Trump's comments suggested a potential breakthrough in U.S.-Iran nuclear talks.

"We're in very serious negotiations with Iran for long-term peace," Trump told reporters in a press pool that AFP News first reported. 

Speaking in Doha, Qatar, during his Middle East trip, the president said, "We're getting close to maybe doing a deal without having to do this... there (are) two steps to doing this, there is a very, very nice step and there is the violent step, but I don't want to do it the second way."

An Iranian source told Reuters that negotiations with Trump administration officials still needed to bridge some gaps before a final deal could be reached. 

Trump's comments followed an NBC News interview with Ali Shamkhani, a top political, military and nuclear adviser to Iranian Supreme Leader Ayatollah Ali Khamenei, who said Tehran is prepared to sign a nuclear deal—provided key conditions are met—in exchange for the lifting of U.S. economic sanctions. 

With Trump Touring Gulf, Iran Offers Huge Nuclear Concession https://t.co/NQ4259UIsE

— zerohedge (@zerohedge) May 14, 2025

Trump confirms reports that Iran have “sort of agreed to the terms” that they cannot have nuclear capabilities!

Trump confirms he is currently in “very serious negotiations with Iran, for long-term peace”!

Trump also highlights how “many people” want war with Iran, but that he… pic.twitter.com/rVSkScNRIN

— Clandestine (@WarClandestine) May 15, 2025

NBC News pointed out that Shamkhani's comments "appear to be the clearest public statement yet on Iran's expectations and willingness to reach a deal from the supreme leader's inner circle." 

Trump has offered "an olive branch" to Tehran after a multi-month maximum-pressure campaign, including economic sanctions and deploying long-range stealth bombers to America's "unsinkable aircraft carrier" - located in the Indian Ocean - ready to be deployed at a moment's notice.

However, last week, ahead of Trump's Gulf tour, we spotted at least one of these stealth bombers returning to the U.S. We suggested this may have been an act of goodwill ahead of talks by the U.S. or possibly just a routine flight.  

On Thursday, Brent crude futures fell 3% to $60 a barrel on expectations that a U.S.-Iran nuclear deal would ease sanctions and increase crude oil on international markets.

"The overnight development of a possible nuclear deal is the sole reason for the morning's weakness. If an agreement is reached, Iran agrees to halt enriching weapon grade uranium and the deal is effectively enforced, which is hard to believe, then the Persian Gulf country's crude oil exports can rise by as much as 1 [million barrels per day]," PVM analyst Tamas Varga told CNBC in an emailed statement. 

"It sounds price negative, but its impact will possibly be mitigated by OPEC+ rolling back on its plan to release barrels back to the market faster than originally planned," he added.

Goldman trader Rich Privorotsky commented on the development: 

Staying with geopolitics there are some rather positive stories emanating out of Iran. "Iran is ready to sign a nuclear deal with certain conditions with President Donald Trump in exchange for lifting economic sanctions, a top adviser to Iran's supreme leader told NBC News on Wednesday." Unclear if the U.S. will agree to the terms but they seem fairly broad: "He said Iran would commit to never making nuclear weapons, getting rid of its stockpiles of highly enriched uranium which can be weaponized, agree to only enrich uranium to the lower levels needed for civilian use, and allow international inspectors to supervise the process, in exchange for the immediate lifting of all economic sanctions on Iran." (NBC news) If confirmed I think oil could eventually end up heading back to the recent lows and I would continue to express any cyclical concerns in this space.

Here's the latest commentary from UBS traders:

Oil Equity Resilience Amid Oil Price Drop Oil prices are down, mainly because of a potential deal with Iran. That could mean up to 500kb/d increased supply coming to market very quickly. Oil equities, however, are already underweight for generalists and specialists have already de-grossed, following the OPEC+ surprises so far this year - hence oil equities are proving to be relatively resilient even though the oil price is down.

If Trump secures a nuclear deal with Tehran, it would cap off a week of landmark agreements with Gulf nations—collectively worth trillions—and add to an already bullish news cycle for the president. Also, this would mean continued easing of geopolitical risk premiums in the region, in other words, lower energy prices for Trump to pursue his 'America First' agenda.