A volatile month draws to a close, with global bond yields higher as inflation expectations remain elevated. With no sign of the end of the Middle East conflict, investors very much remain on edge. Ongoing concerns regarding A.I. spending are also weighing on sentiment.

U.S. stocks and bonds lost ground last week, with global stock markets all gaining ground. GOOG disappointed, which is hard to digest given their performance and outlook. Investors remained very concerned about A.I. investment needs, especially amongst the hyper-scalers. There are important central bank meetings and earnings this coming week.

Markets ripped off the back of a 2 page MoU between the US and Iran that reopened the Strait of Hormuz. The FOMC meeting had its first session under new chair Kevin Warsh, and he sounded even more hawkish than Mr Powell. SpaceX rocketed ahead 42% in its first (almost) full week of life. That's insane, but go ahead – load up! Friday was a holiday in the US.

"....That being said, let’s motor on to what really matters in the coming days – May CPI in the U.S. (released yesterday), upcoming central bank meetings, the SpaceX IPO which is on the launch pad (no pun intended), and U.S. social security."

All four major central banks held their policy rates steady last week, but all of them also had a hawkish bias. Earnings continued to be supportive of higher stock prices, with five of the Mag 7 companies all beating on the top and bottom lines. Yields were higher as bonds got hammered, thanks to ongoing concerns regarding higher oil-induced inflation. There is no end in sight to the Iran-U.S. conflict.

Stocks are in a severe recovery stage, boosted further by the announcement on Friday that the Strait of Hormuz was being reopened to commercial traffic. Oil prices plunged, stocks took another leg up, and yields fell across the curve. Let the good times roll.....or are things really this good?

Stocks were mixed last week, with European stocks turning in the best performance of the week, and Japanese stocks the worst. Tech stocks drove the NASDAQ higher, with the DJIA and Russell 2000 losing ground. Treasuries and gold were better bid. The catalysts were US economic data and several important central bank decisions, all of which were as expected. The coming weeks will be holiday-shortened.

FOREX is in the news, especially as many think the USD has reached its peak and is at an inflection point. What drives FOREX? Read on.

The bond market looks to be doing the Fed's dirty work, sending short term yields to post-pandemic highs. Is the Fed being too methodical?