Third time lucky? Citi changes its S&P target once more after index hits 6,000.

Economic

Summary:

Citigroup raised its S&P 500 target to 6,300 for 2025, citing revived AI optimism and $1 trillion in buybacks. Despite policy risks, improved sentiment and earnings support further market gains.

A revived AI trade and $1 trillion of buybacks will help lift the stock market

It was by just a fraction, but the S&P 500 closed last week above the 6,000 mark again. Another 2.4% advance and the Wall Street benchmark will be back in record territory.

Unsurprisingly, the stock market's 20.4% surge off the mid-April low has left a succession of analysts executing some swift U-turns. S&P 500 SPX targets for 2025 from early in the year were slashed several weeks ago and are now being pushed up again.

Scott Chronert and the team at Citigroup are the latest to turn more bullish. At one point they had an end-of-2025 S&P 500 target of 6,500. That was cut to 5,800 on concerns trade tensions would damage growth. In a new note published late Friday, they argue for 6,300.

That 5% upside from here recognizes the danger of policy shocks, but assumes the market will continue to accept that the worst of the tariff angst is in the rear view mirror, as trade deals are stuck and some White House actions are curtailed by the courts.

"Trading moves aside, we expect investors will tend to look through shorter term policy noise in aggregate," says the Citi team. "Consensus GDP growth expectations for next year have also bottomed, moving higher in recent weeks as the out-year labor market outlook also improves on the margin."

The less bad economic backdrop allows Citi to raise its full year S&P 500 earnings per share to $261 from the previous $255, though that's below the $270 they were forecasting heading into this year.

And better sentiment amid less perceived risk will allow the S&P 500 to maintain a price-to-earnings multiple of 21, helped by corporations adapting to the uncertain policy environment, Citi reckons.

"Longer term, existing and future...technology enhancements should lessen historic earnings sensitivity to business/economic cycles, thus supporting higher multiples relative to history," says the bank.

Such a valuation will be supported by two factors in particular. First, Citi thinks the AI trade is regaining momentum and that this will be reflected in sturdy aggregate capital expenditure.

"[P]ersistence of capex spending intentions has mostly held thus far this year, despite the policy uncertainty. This provides some comfort to structural fundamental growth expectations," says Citi.

Next are buybacks, which according to Citi have increased on a net basis, and which may come to an aggregate $1 trillion this year. "This aligns with a call we made earlier in the year that equity market volatility around policy concerns and investment spending question marks could translate into an increase in aggregate and net buyback activity," they say.

The Citi team argue that their price target vacillations reflect "the volatility path that has come with Trump administration policy uncertainty," but they believe that analysts, companies and investors alike are becoming more used to this.

"With some experience behind, we are comfortable that fundamental volatility will be less than policy volatility," they say.

"As we turn to the second half, '26 earnings improvement on the other side of '25 policy implications on fundamentals will be a key determinant. We allow for mid single digit 2H [second half 2025] gains from here, implying an ongoing mantra to buy pullbacks more so than chasing rallies," Citi concludes. Their S&P 500 target for mid 2026 is 6,500.

Source: morningstar

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Gerik

Political

Changing Perceptions Under Trump’s Return

In a striking shift in Russian public opinion, only 40% of respondents now consider the U.S. Russia’s main adversary, a sharp drop from 76% just one year ago, according to the Levada Center’s latest poll. This marks the first time since 2012 that the U.S. has not ranked first on Russia’s list of least-friendly countries.

This turnaround in sentiment coincides with Donald Trump’s return to the U.S. presidency. Since resuming office, Trump has made gestures toward improving bilateral ties with Russia and has even positioned himself as a potential mediator in the ongoing Russia–Ukraine war. These diplomatic signals appear to have softened Russian public attitudes.

Germany Rises to the Top of the 'Unfriendly List'

The new “most unfriendly nation” in the eyes of Russians is Germany, cited by 56% of respondents. The shift appears tied to the foreign policy direction of newly appointed German Chancellor Friedrich Merz, who succeeded Olaf Scholz in May. Merz has taken a markedly tougher stance toward Moscow, lifting restrictions on the range of German-supplied weapons to Ukraine and openly considering the transfer of long-range Taurus missiles to the Ukrainian government.

This aggressive posture has made Germany the focal point of Russian ire, especially among those who previously viewed Berlin as a more moderate actor. In 2021, only 16% of Russians identified Germany as a primary adversary.

The United Kingdom and Ukraine follow closely behind Germany, with 49% and 43% of Russians respectively labeling them as “unfriendly.”

Trusted Allies: Russia’s Inner Circle

On the other end of the spectrum, Belarus remains Russia’s most trusted ally, with 80% of respondents expressing a positive view. China follows at 64%, reflecting a growing political and economic partnership. Kazakhstan (36%), India (32%), and North Korea (30%) round out the top five most friendly nations according to Russian public opinion.

This pattern suggests a consolidation of alliances within Eurasia and the Global South, particularly among countries either neutral or supportive of Russia in the Ukraine conflict. Notably, North Korea’s presence in the top five shows how geopolitical friction with the West can draw previously peripheral actors into tighter alignment with Moscow.

Trump Diplomacy and European Tensions Shift Russia’s Global Outlook

The dramatic drop in anti-American sentiment in Russia highlights the tangible impact of Trump’s second-term diplomacy. At the same time, escalating tensions with European leaders—especially Germany’s hawkish turn—are redrawing the public’s map of friends and foes.

While long-standing distrust of the West remains, the ranking reshuffle signals a nuanced recalibration of Russia’s perceived threats, driven by real-world policy changes and leadership shifts on the global stage.

Source: RT

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Daniel Carter

Central Bank

Economic

Spain's central bank has adjusted its economic growth forecast for the year, lowering it to 2.4% from the previous 2.7%, according to Governor Jose Luis Escriva. The revision, announced on Monday, is attributed to ongoing global trade tensions, although Spain's projected growth still surpasses the euro zone's average.

In addition to the adjustment for this year, the Bank of Spain has also slightly decreased the growth outlook for the following year, bringing it down to 1.8% from 1.9%. This is a step down from the 3.2% expansion experienced last year, a reduction that Escriva attributes to diminished growth in other economies due to the uncertainty brought about by the ongoing tariff war involving the United States, China, and Europe.

Escriva noted that Spain's central macroeconomic scenario incorporates moderate tariff increases and a fiscal boost in defense spending. This comes as the European Central Bank has projected an average growth of 0.9% across the common currency area in 2025, and 1.1% in 2026.

In addition to the growth forecast, the Bank of Spain has also made adjustments to the inflation forecast for this year, lowering it to 2.4% from the previous 2.5%, as stated by Escriva.

Source: Investing

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Warren Takunda

Cryptocurrency

Key takeaway:

Analysts predict XRP could hit $20–$27 in 2025.

XRP ETF approval odds jump to 98% on Polymarket.

XRP recouped losses made between Wednesday and Friday and hovered around $2.26, up 9.7% from its local low of $2.06.

Analysts said the altcoin may rally into double-digits amid increasing optimism of a possible spot XRP ETF approval in 2025.

Approval odds for an XRP ETF jump to 98%

The likelihood of the US Securities and Exchange Commission (SEC) approving a spot XRP exchange-traded fund (ETF) in 2025 jumped to 98% on Tuesday, according to Polymarket data. XRP Price Will Hit $25 if ETF Approved, Then Crash 90%, New Analysis Says _1

XRP Price Will Hit $25 if ETF Approved, Then Crash 90%, New Analysis Says _1

XRP ETF approval odds on Polymarket. Source: Polymarket

Multiple spot XRP ETF applications from major players like Bitwise, Grayscale, Franklin Templeton and 21Shares have intensified pressure on the SEC, signaling robust demand for regulated XRP investment vehicles.

The launch of XRP futures ETFs by the CME Group on May 19, with $19 million in first-day trading volume, demonstrated market maturity and institutional interest, addressing SEC concerns about regulated derivatives markets.

Three companies across different sectors have unveiled plans to invest over $471 million in XRP treasuries, including Webus International’s $300 million XRP strategic reserve filing with the SEC, further underscoring corporate adoption and growing institutional trust.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong.

These factors and Ripple’s legal clarity after the SEC dropped a lawsuit in March have bolstered market sentiment.

Despite SEC delays on the filings, the CME futures market’s success and corporate strategies have driven Polymarket’s approval odds from 68% in April to as high as 98% in early June, reflecting expectations for approvals by Dec. 31.

Approval of these funds could unlock institutional capital, amplifying demand for XRP and potentially driving prices higher, with some analysts predicting $50 if major players like BlackRock step in.

Analysts anticipate XRP price climbing above $25

XRP price has been stuck below $3.00 since Feb. 1, but analysts say that the crypto could see a massive recovery from the current level, with a target of $25 and above.

XRP price is “targeting double digits” in 2025, according to market analyst Egrag Crypto.

Using his “The Guardian Arch” analysis, the analyst suggested that XRP’s price may rally to $20, potentially topping out at $27 based on past price patterns and timelines.

This analysis uses the relative positions of the 21-week exponential moving average and the 33-week simple moving average as key indicators to identify potential turning points.

The analysis also considers the formation of a bull flag in the monthly time frame, which suggests a continuation of the uptrend toward $20, followed by a possible 86% drop to $3.00 during the bear market.

“The measured move suggests $20, but I believe the next #Bullish phase could be harsh and might drop like the 2021 bear market - around 86%. That could bring #XRP down to roughly $3.00 if we hit $27.”

XRP/USD monthly chart. Source: Egrag Crypto

Fellow analyst Jaydee_757 echoed this, saying that XRP’s current technical setup is “comparing the 2017 hidden bullish divergence” in the weekly time frame.

Jaydee_757 explained that the bullish divergence in 2017 led to a 20x rise in XRP price from around $0.0055 to all-time highs above $3.40.

If the 2017 scenario is repeated, a playout of the bullish divergence could see the price rally toward $25 and beyond, representing an over 1,000% increase from current levels.

Jaydee_757 also said that this massive rally could be followed by a 90% price crash during the bear market, suggesting that $25 could mark the top for XRP’s bull cycle in 2025.

“The present time has a similar structure! Biblical move to $25, then historical crash.”

XRP/USD weekly chart. Source: Jaydee_757

These analyses align with previous predictions of XRP reaching $27 based on chart fractals, Eliot wave analysis and Fibonacci extensions.

Source: Cointelegraph

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Adam

Bond

US Treasuries were trimming overnight gains, with modest weakness in longer dated debt as investors awaited a Thursday auction of 30-year securities that will offer a fresh test of demand for the beleaguered securities.

An early rally that mirrored moves in European bonds lost steam ahead of the Wall Street open for equity trading. Treasuries were clinging to gains on maturities out to the 10-year. That left US government bonds still nursing the bulk of sharp losses from Friday’s stronger-than-expected US jobs report that saw traders dial back Federal Reserve interest rate cut expectations.

A quieter day for economic data Monday is shifting attention to US and China trade talks in London, and events later this week, including consumer inflation on Wednesday and the debt sale the following day. While scheduled bond auctions are typically routine affairs, Thursday’s $22 billion offering will be particularly scrutinized given the recent volatility in long-dated global bonds. Yields have soared in recent weeks amid growing concern over major governments’ spiraling debt and deficits.

“The 30 year is a kind of tail risk type of rate,” said Jeffrey Klingelhofer, portfolio manager at Aristotle Pacific Capital LLC in Newport Beach. “Concerns over deficit spending” matter far more for the long end than, “the seven to 10 year and certainly the shorter part of the curve,” he said.

The US 30-year yield has been marching higher since early April, hitting a peak of 5.15% on May 22, the highest since 2023. It was up around two basis points at 4.99%, from a session low of 4.94% on Monday, while the 10-year yield hovered around 4.51%.

“This is going to be key and really set the tone into June as a whole,” said Lauren van Biljon, fixed income portfolio manager at Allspring Global Investments, on Bloomberg TV, about the 30-year Treasury auction. “We know how much anxiety there is around longer-term financing.”

Mike Riddell, a portfolio manager at Fidelity International, said he’s entered a steepener position, which profits from long-dated bonds underperforming shorter ones. Like PGIM Fixed Income, he said the forces driving ultra-long bonds have shifted away from monetary policy.

“It’s no longer about policy rates, it’s all about the fiscal story and demand supply dynamics,” Riddell said. It’s “really concerning” that there “doesn’t appear to be any change in policy on the back of these market moves,” he added.

The US will also hold auctions for three and 10-year notes on Tuesday and Wednesday, respectively. Bond traders must also navigate the May CPI report, with economists surveyed by Bloomberg forecasting the year-on-year rate ticking up from 2.3% to 2.5%.

“Signs of inflation pressure could knock risk sentiment, and it may even limit dollar upside, especially if it threatens the US’s 30-year Treasury auction on Thursday,” Kathleen Brooks, research director at XTB wrote in a note.

Source: Bloomberg

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Damon

Economic

Wall Street's main indexes were mixed on Monday as investors watched a fresh round of U.S.-China negotiations aimed at mending a trade rift that has rattled financial markets for much of the year.

Top officials from both countries have kicked off discussions at London's Lancaster House, looking to address disagreements around a preliminary trade agreement struck last month that had briefly cooled tensions between the world's largest economies.

The meeting, which could run into Tuesday, comes four days after U.S. President Donald Trump and Chinese leader Xi Jinping spoke by phone, their first direct interaction since Trump's January 20 inauguration.

The leaders had, however, left key issues unresolved.

"The talks will have to go on for some time before we decide whether or not there's actual progress being made. However, most investors remain hopeful that there will be some positive results," said Peter Andersen, founder at Andersen Capital Management.

White House economic adviser Kevin Hassett told CNBC in an interview on Monday the U.S. trade negotiators are seeking a handshake in London to seal an agreement struck by Trump and Xi to allow the export of China's rare earth minerals and magnets to the United States.

Hopes of more trade deals between the U.S. and its major trading partners, along with upbeat earnings and tame inflation data, helped U.S. equities rally in May, with the S&P 500 and the tech-heavy Nasdaq (.IXIC), opens new tab notching their best monthly gains since November 2023.

The S&P 500 remains a little more than 2% below all-time highs touched in February, while the Nasdaq is about 3% below its record peaks reached in December.

Major data releases this week include readings on May consumer prices and initial jobless claims. While investors widely expect the Federal Reserve to keep interest rates unchanged next week, focus will be on any signs of pick-up in inflation as Trump's tariffs risk raising price pressures.

At 10:06 a.m. ET the Dow Jones Industrial Average (.DJI), opens new tab fell 129.75 points, or 0.30%, to 42,633.12, the S&P 500 (.SPX), opens new tab lost 0.32 points, or 0.01%, to 6,000.04 and the Nasdaq Composite (.IXIC), opens new tab gained 44.81 points, or 0.23%, to 19,574.76.

Seven of the 11 major S&P 500 sub-sectors fell, with healthcare stocks (.SPXHC), opens new tab, down 0.6%, declining the most. On the flip side, information technology stocks (.SPLRCT), opens new tab advanced 0.6%.

Most megacap and growth stocks were mixed. Tesla (TSLA.O), opens new tab shares edged 0.5% lower after brokerage Baird downgraded the stock to "neutral". Nvidia (NVDA.O), opens new tab gained 1.3%.

Warner Bros Discovery (WBD.O), opens new tab shares jumped 9.5%, the most on the S&P 500, after the company said it would separate its studios and streaming business from its fading cable television networks.

Robinhood Markets (HOOD.O), opens new tab fell 7.4% after S&P Dow Jones Indices left S&P 500 constituents unchanged in its latest rebalancing, following recent speculation that the online brokerage would be added to the benchmark index.

Merck (MRK.N), opens new tab rose 1.1% after the drugmaker's oral cholesterol pill succeeded in two late-stage studies.

Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the NYSE and by a 1.44-to-1 ratio on the Nasdaq.

The S&P 500 posted 10 new 52-week highs and one new low while the Nasdaq Composite recorded 63 new highs and 27 new lows.

Source: Reuters

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Adam

Commodity

Oil prices were stable on Monday as investors awaited U.S.-China trade talks in London in the hope that a deal could boost the global economic outlook and subsequently fuel demand.

Brent crude futures gained 11 cents, or 0.2%, to $66.58 a barrel by 1312 GMT while U.S. West Texas Intermediate crude rose by 6 cents, or 0.1%, to $64.64.

Brent rose 4% last week and WTI 6.2% as the prospect of a U.S.-China trade deal boosted risk appetite for some investors.

U.S. President Trump and China's leader Xi Jinping spoke on the telephone on Thursday before U.S. and Chinese officials meet in London on Monday in an effort to calm trade tensions between the two nations.

A trade deal between the U.S. and China could support the global economic outlook and in turn boost demand for commodities including oil.

Monday's talks could dampen the impact on prices of a slew of Chinese data releases, said IG market analyst Tony Sycamore.

Chinese export growth slowed to a three-month low in May as U.S. tariffs curbed shipments while factory gate deflation deepened to its worst in two years, heaping pressure on the world's second-largest economy at home and abroad.

"Bad timing for crude oil, which was testing the top of the range and knocking on the door of a technical break above $65," Sycamore said, referring to WTI prices.

The data also showed that China's crude oil imports declined in May to the lowest daily rate in four months as state-owned and independent refiners began planned maintenance.

The prospect of a potential China-U.S. trade deal outweighed concern over the price impact from increased output by the OPEC+ group of oil producers next month.