☕️ 155 years of data shows us this

Good morning! 👋 

It’s Hayley here – I've checked in with Keith from Kyoto, and you know him, he’s meant to be on holiday but he’s watching the markets like a hawk.  

Anyway, he sent me his thoughts to share with you today so here they are, in his own words:  

I remain thrilled by current market conditions and the stories moving ‘em at the moment. 

• Trump in China — the trade détente is real. Watching events like this from outside the US is always great because you can pick up on nuances the Western press often misses. For example, both President Xi and President Trump began with compliments in Beijing. Having spent decades here in the Pacific Rim, I was stunned to see President Xi note that China and the US should be partners not rivals, because the posture suggests that Beijing sees more to gain from cooperation than confrontation right now. It also makes me think the trade truce Xi and Trump reached at their meeting in Korea last fall could become a formal agreement or at least a working frame for one. Both would be great for our money and, arguably, the globe. 
• Warsh confirmed at the Fed — no word on Powell’s follies. Warsh is widely expected to lead a more market-aware, less politically combative Fed and I think that’s probably true. What I still can’t reconcile is Powell’s decision to hang around. That strikes me as very irresponsible and poorly conceived. In fact, I think the fact that he’s going to be hanging around could introduce some summer volatility most don’t see coming and otherwise wouldn’t be there. We, of course, will use that as an opportunity if it plays out; not for nothing, but I continue to think this also raises the specter of higher rates into 2027 – a remark I shared with Maria Bartiromo earlier this year. 🤦‍♂️‍ 
• Earnings continue to impress. Earnings continue to confound the pessimists. The "recession is coming" crowd has been wrong every time, and the scoreboard doesn't lie.  

To be fair, there's no guarantee that this will continue. 

I get it. 

But here’s what I want you to focus on anyway. 

History strongly shows that years with strong early momentum tend to finish that way, and I expect that to be the case this year.  

That’s because markets clearly spend far more time looking for new highs than they do for new bottoms, which is why at the risk of sounding like a broken record, it makes sense to invest accordingly. 

The other thing about this chart that should jump off the page at you — like it does me — is that the data suggests we are far more likely in the middle of another big move than at the end of one. 

Hooyah! 

Back to Hayley. 

I’ll leave you with this today. 

You got this – I promise! 

Now and as always, let's MAKE it a great day. 

Hayley 😀