What is happening in China?
Car retail sales plunged -15% YoY in April, the steepest decline since mid-2022, according to China's National Bureau of Statistics. Home appliance and furniture purchases fell at a double-digit pace, while gold, silver, and jewelry sales collapsed -21% YoY. Overall retail sales rose just +0.2% YoY in April, the weakest reading since December 2022, while fixed-asset investment fell -1.6% in the first 4 months of 2026, returning to contraction. The April data suggest GDP could expand as little as +4.1% YoY in Q2 2026, which would represent a significant miss of Beijing's official growth target of 4.5% to 5% China's economy is struggling. Source: Global Markets Investor
Here's why soaring yields do matter. Annual US interest expense is currently $1.3 trillion.
For context, the largest US government outlay is Social Security. It is $1.6 trillion. Source: zerohedge
According to BofA fund manager survey, the biggest risk to stocks is a "second wave" of inflation.
Source: BofA
Why is the Fed expanding its balance sheet again (QE)?
The stock market is at an all-time high. Credit spreads are near all-time lows. And inflation has been above the Fed's target level for 62 consecutive months, averaging over 4% per year since 2019. So why is the Fed expanding its balance sheet again (QE)? Source: Charlie Bilello
Interesting statistic: If you spent $10 million every day since Jesus was born, you would’ve spent $7.4 trillion. The US debt is $39 trillion.
Of course. it does not account for inflation. The $7.4 trillion figure is in nominal dollars, as if someone spent today’s $10 million every day for ~2,026 years. If you adjust for inflation, the comparison becomes messy because: - Dollars did not exist for most of that period. - Inflation data only exists meaningfully for recent centuries. “$10 million per day” could mean either: -> $10 million in today’s purchasing power each day, or -> $10 million nominal dollars each day, which is unrealistic historically. It still shows that today’s U.S. debt is over five times larger than that total. Source: Bull Theory
Japan Producer Prices Jump by Most Since 2014, Backing BOJ Hike
Source: Bloomberg
Inflation is now outpacing wages in America for the first time in 3 years.
Before the US-Iran war started in late February, inflation was sitting at 2.4%. It has risen to 3.8% in just two months, driven almost entirely by the energy price shock from the war. Real average hourly wages fell 0.5% in April alone and are now down 0.3% annually. Americans are earning more dollars but buying less with them. Source: Bull Theory
More sell-side firms and Fed watchers are removing/delaying cuts from their outlook, including a couple forecasters after the April NFP.
Half now see no cuts this year (and risks are clearly tilted to this group continuing to grow given inertial nature of these forecasts). Source: Nick Timiraos
