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.

US stocks were mixed but tech continued to be the driver. US bonds did less well, as yields moved higher across the curve. Global stocks were generally weaker, as oil inched higher due to ongoing uncertainty in the Middle East with the Strait of Hormuz again the focal point.

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.

Most global bond and stock indices rallied last week, with several global (including U.S.) stock indices closing at record highs. PCE data for April confirmed elevated inflation in the U.S., and the fact that consumers are getting poorer. This is a real contrast with the ever-higher improvement in most global asset prices.

I started penning this update with my recurring rant about the antics of the Trump Administration. The daily “war is over” rhetoric coming from the leader of the free world is super-annoying, especially since Iran and the U.S. remain more or less deadlocked, with the Strait of Hormuz closed and no oil flowing through it. But does this really matter anymore, at least to investors? Yes, higher oil prices are hurting consumers (see “Consumer confidence” below) and will rev

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?

The US and Iran agreed to a two-week ceasefire on Tuesday evening, not long after President Trump had warned Iran that “a civilisation will die tonight”. Perhaps this belligerent rhetoric was effective, or perhaps not. In any event, the bombing stopped – or at least most of it – on Tuesday evening as a fragile two-week ceasefire was agreed and started. US and Iranian delegations are in Islamabad this weekend negotiating what will hopefully be a permanent solution to this c

Markets deteriorated further as the US threats amount to nothing more than deferred deadlines as Iran digs in its heels. Higher oil prices and an unclear picture of how this war might play out is rattling nearly all corners of the financial markets.

Global stocks and bonds continued to spiral down as the war in the Middle East continues with no end in sight. In this update, I discuss the Fed's dilemma in a stagflation scenario, and how oil prices are likely to affect both headline and cor inflation.