Hedge funds buy stocks at quickest pace since Nov 2024, Goldman Sachs says

Stocks

Economic

Summary:

Hedge funds bought global stocks at the fastest pace since November 2024, led by tech and AI-related firms, amid strong May market gains in the U.S. and Europe, Goldman Sachs reported.

Hedge funds bought global equities last week at the quickest pace since November 2024, Goldman Sachs said in a note, just as stock markets ended the month with their most positive May performance in decades.

The S&P 500 advanced just over 6% in May, its biggest monthly rise since November 2023 and its best gains for the month of May since 1990. The Nasdaq rallied about 9.6%, which was also its biggest monthly gain since November 2023 and its best May performance since 1997.

Hedge funds ended the week bullish in every global region, led by North America and Europe, the Goldman Sachs report said.

Technology companies attracted the highest interest, with hedge funds accumulating the largest weekly number of net long positions in the sector in over five years. Buying centered on firms integral to the artificial intelligence industry, including semiconductor manufacturers, technology hardware producers and electrical equipment companies, the report said.

North American tech companies were favoured by hedge fund trades, followed by European counterparts, Goldman Sachs said.

The pan European stock index returned more than 5% in May. Hedge funds bought European stocks for the third straight week and at the fastest pace in three months, the Goldman note said.

Companies in Spain, France, Finland, Germany, Sweden and Denmark were the most net bought markets this week, while Ireland, the Netherlands and Switzerland were the most net sold, said the Goldman report.

European stock sectors bought by global hedge funds last week included consumer discretionary, financial, health care and communications companies, the data showed.

Hedge funds mostly bought single stocks but also made some long trades in stock indexes too, said Goldman Sachs.

A long position expects an asset price to rise.

Source: Reuters

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Adam

Cryptocurrency

Bitcoin held its ground above $104,000 on Monday despite the U.S.-China trade tension and court-driven tariff drama that rattled global markets.

Last Friday, U.S. President Donald Trump accused China of violating a mid-May agreement to pause tariff escalation and announced a hike in import tariffs on steel and aluminum, from 25% to 50%, effective June 4.

The pause gave rise to a “Trump always chickens out” meme and its acronym TACO. The president has seemed eager to prove his critics wrong.

During a campaign rally at a U.S. Steel plant in West Mifflin, Pennsylvania, Trump said the tariff hike will “even further secure the steel industry in the United States,” while touting a deal between Nippon Steel and U.S. Steel as a win for American workers.

The geopolitical whiplash triggered nearly $1 billion in crypto liquidations, according to QCP Capital’s Monday update.

BlackRock’s iShares Bitcoin Trust ETF, fresh off a record 34-day inflow streak, saw $430 million in outflows on May 30, as per Farside Investors data.

Yet BTC remained composed, signaling a reset in leverage rather than investor panic.

At the moment, Bitcoin is trading at $104,158, a slight increase of 0.1% over the past 24 hours, as per CoinGecko data.

“Risk reversals have begun to normalize… [and] perp funding has turned flat,” the QCP wrote, suggesting muted short-term price swings.

Institutional interest has not waned eithe.; Japan’s Metaplanet added another $114 million in BTC post-selloff, bringing holdings to 8,888 BTC, worth over $925 million.

QCP referenced the TACO acronym, which has become popular among Trump’s critics, but noted that Friday’s escalation indicated he may be aiming to defy that perception.

With no major policy catalysts before July 8, BTC may stay rangebound between $100K and $110K, QCP noted, citing high open interest at those levels.

Arthur Azizov, founder and investor at B2 Ventures, told Decrypt that the tariff headlines were contributing to market churn, but not a structural shift.

Azizov called the tariff “likely to trigger some market volatility, particularly in risk assets like crypto,” but added, “that doesn’t necessarily mean we’ll see a sharp immediate drop in Bitcoin or other digital currencies.”

“Over time, we've already seen multiple headlines about tariffs, their delays, reversals, and policy shifts — all of that has caused some market swings, but for long-term investors, it hasn’t made a huge difference in the big picture,” the expert said.

China Responds to Trump Claims

On Monday, the Chinese Embassy in Washington posted a statement from China’s Ministry of Commerce on X, calling Trump’s claims “groundless” and warning of “forceful measures” in response.

The ministry said China had upheld the Geneva deal, while the U.S. imposed “discriminatory” actions including AI chip bans, visa revocations, and software restrictions.

China is the world’s largest steel exporter, but sends little to the U.S. due to a 25% tariff imposed in 2018. It ranks third in aluminum supply, making the new 50% tariff a direct blow to the nation.

A federal appeals court temporarily reinstated Trump-era tariffs on May 29, pausing a trade court ruling that had blocked them as unconstitutional.

On Sunday, Trump claimed on Truth Social that if judges were to rule against his tariff powers, it “would allow other Countries to hold our Nation hostage with their anti-American Tariffs.”

Source: decrypt

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Adam

Commodity

Futures tracking the prices US manufacturers pay for aluminum and steel surged after President Donald Trump said he will double tariffs on the metals this week.

Contracts linked to the prices that manufacturers pay to get aluminum delivered to the US Midwest jumped 54% to the highest since at least 2013 on the Comex exchange in New York on Monday — offering an early glimpse of the much higher costs for American factories, with import levies set to rise to 50% from Wednesday.

Aluminum used in everything from beer cans to engine blocks and window frames was priced at a premium of 58 cents a pound, or about $1,280 a ton, in the Midwest over benchmark London contracts. That suggests US buyers could end up paying about 50% more than international competitors to get hold of the metal.

US Aluminum and Steel Prices Surge as Trump Doubles Tariffs_1

US Aluminum Premiums Surge on Trump Tariff Hike

Trump hopes the increased levies will protect margins for domestic mills and spur investment in new production capacity, and shares of US steel and aluminum makers surged in after-hours trading after the announcement on Friday. But construction companies have warned that levies on steel and aluminum — which Trump had already raised from 10% to 25% — will increase the cost of critical building materials.

Comex steel futures were up more than 8% in early trading on Monday — and while both contracts are relatively illiquid — the moves indicate that the commercial burden of the tariffs will weigh most heavily on the US aluminum market. More than 80% of the aluminum used in the US is supplied via imports, while less than 20% of the country’s steel is sourced from overseas, according to Morgan Stanley.

“We expect prices to rise — the US does not have enough domestic capacity of either,” analysts at Citigroup Inc. said in an emailed note. For aluminum in particular, the tariffs have “mostly just functioned as a tax on consumers thus far.”

Benchmark aluminum contracts on the London Metal Exchange traded 0.6% higher at $2,458 a ton as of 3:18 p.m. local time. Copper was up 1.1% in London and more than 4% higher on Comex, as analysts said the heightened levies make it more likely that Trump will follow through with plans to place tariffs on the metal.

“The market also appears to be pricing a higher likelihood of copper tariffs, with COMEX outperforming LME,” Morgan Stanley analysts led by Amy Gower said in an emailed note, noting that US buyers have been front-loading imports ahead of potential tariffs. “For now, the COMEX premium is likely to continue pulling material to the US, drawing down ex-US inventories and keeping ex-US markets tight.”

Source: Bloomberg

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Devin

Economic

When the initial tariffs were announced on April 2, it was like the plug was pulled on the US economy. Suddenly international trade with anyone seemed completely uneconomical. Stocks immediately fell off a cliff.

Over the next several days and weeks the administration put in place various exceptions and carveouts and delays, and, as of today, the US economy mostly looks and feels like it did on April 1. The economy didn’t come to a sudden stop.

But today there’s more evidence that we’re seeing the economy leak air or lose momentum. We got the new ISM, and it showed ongoing softening in the manufacturing sector. New orders came in at 47.6, which is above the 47.2 from the month before, but anything below 50 means contraction. That seems right. Things are slowing down, but not as fast as they were in April. Same with employment. The number came in at 46.8 (contraction) but above the 46.5 in April. The overall headline number came in at 48.5, which was actually worse than last month’s 48.7.

Here is the commentary from today’s report. I highlighted some of what seemed notable:

Meanwhile, we got April construction spending today and that actually showed a 0.4% decline versus an expected rise of 0.2%. And the March number was revised from -0.5% to -0.8%.

Meanwhile, as we wait for the Non-Farm Payrolls report, something to watch is that last week we saw Continuing Jobless Claims hit their highest level since late 2021, signaling, well … it’s obvious what that’s signaling.

It doesn’t look like the US economy is falling off a cliff. But the big question remains whether the Federal Reserve can or will react to softening in a timely manner in an environment where trade policy continues to be so volatile.

I said last week in our episode with Mike Cembalest that it feels like the market is hopping from big narrative to big narrative. One day (as Joe mentions above), it’s all about strict tariffs bringing the US economy to a shuddering halt. The next day it’s about bond vigilantes, or the end of American exceptionalism, or tax cuts, etc.

This isn’t really irrational behavior on the part of investors. What’s coming out of the Trump administration are big sweeping policies that have potentially big consequences. But with so much back and forth, and with so much of the final policy outcomes still up in the air, investors are basically forced to flit from thing to thing to thing.

It also takes time for policies to actually work their way through the system, which is why there’s been so much obsessing over the hard versus soft data lately. The sentiment surveys have been pretty bad (although they picked up after many of the tariffs were delayed), but the hard data has yet to really start deteriorating. So who knows how much impact all the policy drama has been having on the actual economy?

Anyway, in the spirit of narrative-of-the-moment spotting, Brent Donnelly over at Spectra Markets puts forth a new candidate: jobs.

As he points out, we’re getting not one, not two, not three, but FOUR employment data points this week (already coming hot on the heels of the continuing jobless claims last week). They are: Jolts on Tuesday, ADP on Wednesday, Initial Jobless Claims on Thursday, and Nonfarm Payrolls on Friday. These will be big entrants in the hard versus soft data debate, and could provide valuable hints about how quickly the Fed might need to respond to a weakening in the employment picture.

Speaking of weakening, the employment portion of today’s ISM rose slightly compared to last month, but is still firmly in contractionary territory. More worryingly, companies are still reporting that their preferred method of reducing headcount is through layoffs (rather than, say, hiring freezes and attrition). That’s an “indication that staff shrinking continues to be urgent,” says the ISM’s Susan Spence.

All of this is a really good reason to focus on the jobs data this week.

President Trump wants Apple to build iPhones in the United States. Apple itself has tried to extricate itself from the Chinese supply chain in various ways. But for the most part, the company remains deeply interwoven with China in a way that seems impossible to get out of. On this episode, we speak with Patrick McGee, San Francisco correspondent for the Financial Times and the author of the new book Apple in China: The Capture of the World’s Greatest Company. We talk about how the company became so enmeshed in China, and why any way out seems unfathomable today.

Source: Bloomberg Europe

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Adam

Economic

JPMorgan Chase CEO Jamie Dimon said on Monday that the rising U.S. national debt is a "big deal" that could create a "tough time" for the bond market that causes spreads to widen, he told Fox Business’ "Mornings with Maria" program.

The comments echo his earlier warnings about potential market turmoil, citing rising U.S. government spending.

"If people decide that the U.S. dollar isn't the place to be, you could see credit spreads gap out; that would be quite a problem," Dimon said. "It hurts the people raising money. That includes small businesses, that includes loans to small businesses, includes high yield debt, includes leveraged lending, includes real estate loans. That's why you should worry about volatility in the bond market."

Shifting U.S. economic policies have sent bond markets tumbling in recent weeks.

Dimon, 69, is one of the most prominent voices in corporate America and has regularly been consulted by administrations during times of crisis. His name was floated for senior economic roles in government during the 2024 presidential campaign, including Treasury Secretary, but he stayed put at the bank.

Dimon has been running the biggest U.S. lender for more than 19 years, outlasting many other CEOs.

When asked about the timeframe for his succession, Dimon said "it's several years," adding, "there will be an appropriate time and then I may stick around for a couple of years as chairman or executive chairman... I love what I do."

source : Reuters

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Adam

Economic

China–U.S. Trade War

President Donald Trump and Chinese President Xi Jinping are likely to speak this week, a senior White House official told CNBC on Monday.

The expected discussion follows a series of flare-ups between Washington and Beijing that threaten to derail a tentative trade agreement that the two economic superpowers reached just weeks earlier.

The two leaders could speak one-on-one “very soon,” though probably not today, the official said on condition of anonymity.

U.S. market indexes opened lower on Monday morning, as investors responded to the increasingly confrontational tone of public messages between the U.S. and China.

Trade between the countries — who rely heavily on each others’ business — was effectively crushed in April, when Trump ratcheted blanket tariffs on Chinese imports up to 145% and Beijing issued steep retaliatory duties. The two sides agreed to scale back most of those tariffs for 90 days following an initial round of trade negotiations in Switzerland in mid-May.

But each nation has since accused the other of undermining the agreements struck in Geneva.

In recent weeks, the Trump administration has accused China of slow-walking renewed exports of critical minerals to the United States, while Beijing has called out Washington for issuing a warning against using Chinese chips.

On Monday, a Chinese Commerce Ministry spokesperson accused the U.S. of trying to “unilaterally provoke new economic and trade frictions, increasing the uncertainty and instability in the bilateral economic and trade relations.”

Trump administration officials have acknowledged that progress in U.S.-China trade talks has slowed. Treasury Secretary Scott Bessent said Thursday that breaking the logjam will “require both leaders to weigh in with each other.”

But Trump has vented frustration with China as the roadblocks have emerged.

“China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump wrote in a Truth Social post Friday.

“So much for being Mr. NICE GUY!” he wrote.

source : cnbc

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Gerik

Economic

China–U.S. Trade War

Rare Earths as a Trade Pressure Valve

As US-China trade tensions intensify following President Trump’s accusations of a Geneva agreement breach, Beijing’s control over rare earth minerals has re-emerged as a powerful strategic tool. These materials—vital for military hardware, semiconductors, and consumer electronics—are predominantly produced in China, giving the country a formidable edge in ongoing trade and technology disputes.

Washington had hoped for a reset through the Geneva accord, which included China's commitment to ease rare earth export restrictions in exchange for tariff relief. But US officials now claim China is stalling on those obligations, particularly in lifting opaque non-tariff barriers that have slowed the flow of critical minerals. This friction has cast doubt over the 90-day tariff pause, with potential for tariffs to snap back to levels above 100% if progress stalls.

A Deepening Asymmetry in Strategic Commodities

China supplies nearly 70% of the world’s rare earths, and the permitting process for exporters remains tightly controlled by Beijing. This bureaucratic bottleneck gives Chinese authorities the ability to restrict exports with minimal transparency—delays that are now rippling through global supply chains. According to the American Chamber of Commerce in China, while some export approvals are now trickling through, they are well behind industry expectations.

The impact is already visible. Ford temporarily closed a plant in Chicago due to a shortage of rare earth components. Defense contractors have flagged mineral supply as a top vulnerability in aviation and missile production. India, another major importer, has also reported pending permit approvals, warning of looming production disruptions.

This pattern suggests a form of supply-chain pressure that imposes limited immediate cost on China, while inflicting logistical and financial pain on the US and its allies. Unlike tariffs—which also harm domestic producers—rare earth restrictions primarily target foreign dependency and can be deployed more selectively.

Technology and Security: Parallel Fronts of Confrontation

Simultaneously, the US has escalated its tech restrictions, blocking China’s access to advanced chip design software, banning critical jet engine components, and tightening controls on Huawei. These moves mirror Beijing’s rare earth strategy: targeted export limitations in strategic sectors. However, Washington’s efforts are constrained by its lag in building an independent supply chain for these critical inputs.

While the Department of Defense has pledged a self-sufficient mine-to-magnet rare earth ecosystem by 2027, execution remains elusive. The US lacks sufficient natural reserves, skilled engineers, and viable commercial entities capable of operating profitably in a low-margin industry. Attempts to fill the gap via foreign investment—such as MP Materials’ deal with Saudi Arabia and deeper ties with Australia’s Lynas—highlight how far Washington still needs to go.

According to analysts like Cory Combs of Trivium China, China’s leverage is more entrenched and immediate than Washington’s, which remains heavily aspirational. Chinese firms have also made notable progress in substituting US chip technologies, reducing their vulnerability in return.

Global Ramifications: Allies in the Crossfire

The rare earth squeeze is not only a bilateral issue. Countries such as India and Japan have also been affected. India’s Bajaj Auto has already warned of halted electric vehicle production if Chinese shipments don't resume. Japanese officials have flagged rare earths as a central concern in their trade negotiations with the US, underlining the broader regional risk of being collateral damage in the Sino-American economic standoff.

If China widens its restrictions to include light rare earths—used in consumer electronics and batteries—the economic impact on US tech giants and auto manufacturers could be severe. For now, Beijing is holding back from that option, using the current controls more as a geopolitical warning than as an economic weapon. However, experts like Neil Thomas from the Asia Society caution that these tools remain on the table if tensions escalate further.

A Fragile Truce and an Uneven Battlefield

The rare earths dispute underscores the structural imbalance in the US-China trade conflict. While Washington holds sway in advanced technology controls, Beijing’s command over critical minerals gives it enduring and underappreciated influence. This leverage is especially potent given the strategic urgency of minerals in defense, aerospace, and clean energy.

With the Geneva truce unraveling and legal, political, and commercial tensions on the rise, Beijing’s grip on rare earths could become a central axis of confrontation. Unless the US accelerates its domestic supply chain development and deepens global partnerships, its industries will remain exposed—technologically advanced, yet materially dependent on a rival power.