During a huge risk-on advance, US High yield spreads have tightened 152 bps since April 7. With spreads now at 309 bps above Treasuries, credit market investors are back to pricing in a very optimistic outlook with no recession and few defaults.
Charlie Bilello
2. AI Premium to Overall Market at 2017 Levels
The P/E premium vs the overall market for a basket of 48 AI-related stocks is back down at levels last seen in 2017.
Daily Chart Book
3. Emerging Markets Ex-China Breakout
Topdown Charts
4. PPI Number Good for Lower Inflation
Liz Ann Sonders
5. Housing Market Needs Lower Rates
Inflation rose to levels not seen since the 1980s and high mortgage rates have largely frozen the US housing market, as housing affordability plunged to its lowest level in decades.
Cresset
6. Defense Spending Not Slowing Down
Barron’s
7. Aerospace/Defense ETF
CNN
8. NATO Arms Supplies by Country of Origin
Semafor
9. With US trade war, China now top buyer for Canadian crude on Trans Mountain Pipeline
Via Reuters: China has emerged as the top customer for Canadian oil shipped on the expanded Trans Mountain pipeline, ship tracking data showed, as a U.S. trade war has shifted crude flows in the year since the pipeline started operating.
China’s new interest in Canadian oil comes as U.S. President Donald Trump’s trade war has strained relations between longtime allies Washington and Ottawa. It also reflects the impact of U.S. sanctions on crude from countries like Russia and Venezuela.
10. 49ers to Sell Nearly 6% Stake at Record Sports Team Valuation
Via Sportico: The owners of the San Francisco 49ers have reached an agreement to sell about 6% of the NFL franchise to a trio of Bay Area families at a valuation higher than $8.5 billion, according to a person familiar with the details, the highest valuation ever for a global sports team in a transaction.
The buyers are the Khosla family, the Griffith family and Deeter family, said the person, who was granted anonymity because the details are private. The Khosla family is buying the biggest stake, the source said, but it is unclear exactly how the 6% is being broken up between the three.
The NFL’s finance committee has reviewed the deals, though they still require more formal approval. A representative for the 49ers declined to comment. Attempts to reach the three families weren’t immediately successful.
The 49ers are owned by the York family. Sportico values the team at $6.86 billion.
The transaction continues a trend of recent minority stake sales in the world’s most valuable sports league. While the NFL opened its ownership ranks to private equity last year, some continue to prioritize individual investors. The Eagles recently sold two minority stakes to individuals at an $8.1 billion valuation. The New York Giants are in the market looking to sell about 10%, and the current owners’ preference is for high-net-worth individuals, not institutional funds, Sportico previously reported.
1. Interesting Comments on U.S. Dollar from Jim Reid at Deutsche Bank
In a big rebound for US risk assets of late, the USD bounce has been less impressive. In a short note overnight, FX strategist Tim Baker looks at whether DB’s medium term bearish forecasts on the Dollar that were published three weeks ago here remain intact. The short answer is yes.
The recent policy and market volatility have likely been sufficiently concerning to prompt enough of a re-think on investing in the US, especially relative to the very long consensus position at the start of 2025. This coincides with the backdrop of extremes in valuations and positioning (plus there’s the fiscal story in places like Germany and China).
On the most simple metric, the USD has been more than 20% expensive vs PPP for three years – an unprecedented run as we show in the CoTD. Coupled with very high equity valuations relative to its peers and a few other factors mentioned in Tim’s note we continue to think the start of a slow downtrend is in.
Deutsch Bank
2. U.S. Dollar Rally Fails at 50-Day…50-Day Still Below 200-Day
StockCharts
3. MAG 7 ETF +33% from Lows
StockCharts
4. Update: Mag 7 vs. 493 Stocks
Jones Trading
5. ChatGPT 780m Visits in April vs. Next Closest 34m
StockCharts
6. More Stats on Record Stock Buybacks
The Kobeissi Letter
7. One Month Ago “Extreme Fear”
CNN
8. Mortgage Rates Normal vs. Inflation
Nick Gerli
9. Total Mortgage Originations for Second Homes -66% from 2021 Record Level
Charlie Billelo
10. Warren Buffett 10 Word Answer: When Did You Know You Were Rich?
I bet we all in this room live about the same. We eat about the same and sleep about the same. We pretty much drive a car for 10 years. All this stuff doesn’t make it any different.
I will watch the Super Bowl on a big screen television just like you. We are living the same life.
I have two luxuries: I get to do what I want to do every day and I get to travel a lot faster than you. I travel distances better than you do. The plane is nicer. But that is about the only thing that I do a whole lot different.
You’re rich if you are working around people you like.
I really knew I was rich when I had $10,000. I knew a long time ago that I was going to be doing something I loved doing with people that I loved doing it with.
Credit: BofA’s private clients have been exiting leveraged finance assets.
The Daily Shot
3. Investors Get Defensive but QQQ Closes Above 200-Day
Subu Trade
4. Coinbase Joins S&P 500—Sits $150 Off 2024 Highs
StockCharts
5. Charles Schwab $10 Trillion in Assets Under Management—Breaks Out to New Highs
StockCharts
6. April Large Budget Surplus
Presenting Exhibit A: in April, the US Treasury generated a $258.4 billion surplus after last month’s $160.5 billion deficit; this the second biggest surplus on record, with just the $308 billion bumper surplus in 2021 bigger.
ZeroHedge
7. Trump in Saudi Arabia Asking for Investment in U.S. but MBS Betting Trillions on Home Mega Projects
Bloomberg
8. Latin American Exports 42% to U.S.
Semafor
9. How Do Universities Make Money?
Voronoi
10. Stop Chasing Comfort, Start Building the Future You
Stop Chasing Comfort, Start Building the Future YouThe future you is an unfinished prototype.
KEY POINTS
Growth comes from embracing discomfort, not from seeking comfort or immediate results.
Identity evolution requires releasing outdated roles and accepting productive discomfort.
Mental toughness and resilience are built by pushing through perceived limits, not avoiding them.
Psychological safety and feedback are essential for personal development and successful transitions.
Via Psychology Today: In a world obsessed with instant results, busyness is often mistaken for progress. Meetings, emails, and endless tasks can create the illusion of momentum, but are we moving forward? True growth doesn’t come from checking boxes; it comes from leaning into the uncomfortable, uncertain work of becoming who we’re meant to be.
Psychologists like Walter Mischel and Carol Dweck have shown that while we’re wired for immediate gratification, lasting development requires embracing productive discomfort. Discomfort, in the right context, isn’t a warning sign; it’s proof that growth is happening.
The best leaders, teams, and organizations don’t avoid discomfort, they use it. It’s their edge for innovation, resilience, and transformation.—Brene Brown, University of Houston
The future you is an unfinished prototype
Through repeated endurance challenges, I discovered the true power of the 40 Percent Rule: the real limit isn’t physical, it’s mental. Discomfort wasn’t a sign to stop; it was my mind clinging to the familiar. Resilience isn’t just about pushing through, it’s about realizing how much more you’re capable of.
These experiences revealed something deeper: discomfort isn’t the enemy, it’s the entry point. Life’s transitions, whether chosen or forced, are often uncomfortable. But that discomfort? It’s not just to be survived, it’s a catalyst for growth.
Five ways to embrace it.
1. Lean Into Stretch Experiences
Growth rarely happens in comfort. Transitions often feel heavy because we carry the weight of outdated expectations and identity scripts. Our narrative identity is the evolving story we tell ourselves about who we are. To move forward with intention, we must first release what no longer serves us. Rituals of release, like writing a letter to your former self and burning it or leaving behind a symbolic object on a walk, can create psychological closure, a process linked to emotional integration and renewal.
Next, seek out stretch experiences: take a solo trip, learn a new skill, or pursue a goal that intimidates you. These challenges activate the growth mindset, the belief that abilities evolve through effort. Stretching yourself builds confidence, neural adaptability, and a deeper capacity for uncertainty.
The goal isn’t to erase the past. It’s to loosen your grip on who you were, so you can grow into who you’re becoming.
2. Invite Honest Feedback and Self-Reflection
Life transitions often trigger identity dissonance: the uncomfortable gap between your past self and your emerging one. Clinging to outdated roles, like the overachiever, the people-pleaser, or the expert, can lead to identity foreclosure, where we lock ourselves into fixed narratives too early or for too long.
To evolve, we need mirrors. Honest feedback from trusted mentors, friends, or colleagues can offer blind-spot clarity and help expand our sense of self. At the same time, self-reflection practices like journaling, mindfulness, or even voice-memo reflection can deepen self-concept clarity and a stable, coherent understanding of who you are across time.
Treat identity as a draft, not a declaration, ask: What part of me is ready to be released? What values no longer fit?
This isn’t about erasing the past. It’s about consciously reauthoring the story of you.—Cory Muscara, author and former monk
3. Focus on Progress, Not Perfection
Nature doesn’t grow in straight lines, and neither do you. Progress is often irregular, nonlinear, and full of feedback loops. Instead of forcing a rigid plan, consider a fractal mindset: the idea that small, self-similar shifts across different areas of life can lead to exponential transformation.
This is how change works in the real world: through micro-adjustments.Shift your morning routine by five minutes. Reframe one piece of internal dialogue. Swap one unhelpful habit for something nourishing. Each act wires your brain for change, reinforcing the principle of neuroplasticity, that your brain is always capable of rewiring toward who you’re becoming.
Progress isn’t about having it all figured out. It’s about showing up, again and again, with just enough curiosity and courage to take the next small step.—Woody Allen, filmmaker
4. Expose Yourself to Controlled Discomfort
Just like in physical training, emotional resilience is built by repeated exposure to challenge, not all at once, but in small, deliberate doses. This controlled exposure is a principle rooted in cognitive-behavioral therapy, where gradual, repeated contact with discomfort rewires our response to stress.
Proactively shake up your routine: Disrupt yourself before the world does. With time, these intentional acts of discomfort increase your psychological flexibility and the ability to adapt, recover, and respond creatively under pressure.
But true growth isn’t just about leaving your comfort zone occasionally, it’s about disrupting patterns intentionally before life forces your hand. If you only stretch when circumstances demand it, you’re always in reaction mode. And that’s the real power of resilience.—Unknown
5. Cultivate Psychological Safety for Yourself
Transitions feel destabilizing because they disrupt our sense of control or our internal locus of control, the belief that we can influence our outcomes. When that center is shaken, it’s easy to feel unmoored. But discomfort doesn’t have to break you, it can become the raw material for reinvention.
Uncertainty, when approached with intention, becomes a laboratory for growth. Acknowledge your fears without giving them the microphone. This is the essence of cognitive reappraisal, the ability to reinterpret challenges in ways that empower rather than paralyze.
Treat your transition like an art project. Surround yourself with people who value growth over perfection. Learn to say no to misaligned obligations and protect your energy for what aligns with your evolving self.
What can you experiment with? Which constraints can be reframed as creative catalysts? The goal isn’t to eliminate uncertainty, it’s to become someone who thrives within it.—Viktor Frankl, neurologist and psychologist
The Competitive Advantage of Embracing Discomfort
The challenge is not to seek the easiest path but to identify the right kind of discomfort, the kind that fuels progress rather than paralyzing fear. It’s the discomfort that helps us grow as humans and challenges us with the fundamental question: What am I supposed to be learning from this experience?
Growth requires a mindset shift: challenges aren’t roadblocks, they’re signs we’re operating at our edge, where real development takes place. The “future you” isn’t a finished product; it’s a prototype in motion. Time spent in uncertainty, awkwardness, or even doubt isn’t a detour; it is the path forward.
The real question isn’t just Where do I want to go? But, am I willing to embrace the discomfort it takes to get there? When we do, today’s challenges become stepping stones.
True transformation begins not in mastering the present, but in daring to evolve into what’s next.—Søren Kierkegaard, philosopher and theologian.
1. Chinese Stocks Erase Losses Since Liberation Day
Bloomberg
2. Japan ETF Breaks Out of Sideways Pattern
StockCharts
3. Foreign Investors Own 32% of Japan Stocks
According to the Tokyo Stock Exchange’s latest data, foreign investors now own 32% of Japan’s stock market, up sharply from 5% in the 1970s, while locals hold just 17%. And the gap might keep growing: as US stocks slumped amid tariff threats in April, foreign investors pumped a net $8.3 billion (¥1.2 trillion) into Japanese equities — a severe reversal from net outflows in the previous two months, per Japan Exchange Group.
Now, Japan is trying to lure its young, less trauma-ridden locals back into the market. The Tokyo Stock Exchange plans to lower the minimum investment threshold, aiming to make stocks more accessible, while the government expanded tax exemptions for retail investors last year. It’s also promoting financial literacy among millennials and Gen Zs.
All of this might be starting to pay off: according to the Investment Trusts Association, 36% of people in their 20s in Japan invested in mutual funds, stocks, and bonds last year, up nearly 3x from 2016.
Sherwood News
4. Short Interest in Stocks was Below Average 2020-2024…Got Back to Average on Tariffs
The Irrelevant Investor
5. Here is the Gold vs. U.S. Dollar Chart…Dollar Rallying on Chinese Trade Deal Today
yahoo!finance
6. Trump Exec Order to Lower Drug Prices…XLV will Open Below Long-Term 200 Week Moving Average….Next Support 2023 Levels
StockCharts
7. Where Can Younger Buyers Afford Homes?
NY Times
8. Washington DC Homes for Sale
Liz Ann Sonders
9. Wit and Wisdom from Warren Buffett
Via Ted Merz: Few people are as quotable as Warren Buffett.
I attended the Berkshire Hathaway annual meeting this weekend. It ended Saturday afternoon in dramatic fashion with the 94-year old money manager announcing he was stepping down after 60 years. The crowd gave him a standing ovation.
Before the bombshell announcement, Buffett spent four-and-a-half hours dropping wit and wisdom in a way only he can do.
I find that sometimes quotes convey the feeling from the room much better than a narrative article so I compiled a list of my favorites from the meeting.
It’s worth reminding readers that all of these comments came on the fly in response to specific questions from shareholders about business and life.
“People have emotions but you have to check them at the door when you invest.”
“The world is not going to adapt to you, you need to adapt to the world.”
“Everyone has setbacks, it’s part of life. You certainly have a setback when you die.”
“You get a few breaks in life in the people who you will meet. You need a handful of them. And when you have them, you treasure them.”
“Patience is not a constant asset or liability. You don’t want to be patient when the time comes to act.”
“If every time you swung you hit a homerun the game wouldn’t be very interesting.”
“Make the most of the people you meet who are going to make you a better person and forget about the rest frankly.”
“Every now and again you get an extraordinary opportunity. Most of the time you don’t have much of an edge.”
“If you are in something in which you are going to lose you should quit.”
“We are not in the business of solving unsolvable problems.”
“Don’t take a position on anything unless you can argue the opposite just as well.”
“Values change and they don’t always change upward.”
“If you need lots of money you should probably behave in a way that encourages them to give you money.”
“I was born in 1930 and things got much more attractive over the next two years and I didn’t do anything about it. That was the opportunity of a lifetime and I blew it by worrying about the kid in the next crib.”
“If Berkshire went down 50 percent I would regard that as a fantastic opportunity.”
“I don’t get fearful the way other people are afraid in a financial way.”
“It’s not that I don’t have emotions, but I don’t have emotions about the price of stocks.”
“It’s always better to make a lot of money without putting up capital.”
“You can’t blame humans for behaving like humans but you should understand their motivations.”
“Look around to see what interests you. I wouldn’t try to be someone else.”
“You can’t say the system is a failure but you can say it’s very difficult to make major changes.”
“It’s easier for an organization to see its quality go downward than upward.”
“I’ve already told you more than I know so let’s move on.”
We all have the ability to emulate the Oracle of Omaha in the ways that really matter By Brett Arends
I’ve been following Buffett and writing about him for a quarter-century, which is long by some measures and no time at all by others. (He has been managing money for nearly three times that long.) Now that he has announced, at age 94, that he is at last retiring as CEO of Berkshire Hathaway, there are all the usual encomia about his investment genius and his stock-picking skills. And those are extraordinary, no question: It is very unlikely we would see his like again, even if we lived 10 lifetimes.
But it’s all the other stuff that has really struck me over the years — the smart decisions about life and money he’s made that don’t get so much attention. And that’s a pity, because those who try to replicate Buffett’s investment success probably won’t succeed. But everyone can learn from the other stuff.
1. He never moved to New York. Buffett never left Omaha, Neb., where the cost of living is a fraction of New York City and the quality of life, for him and probably for most people, is going to be much higher. (Bankrate reckons the cost of living in Omaha is 60% below that in Manhattan — meaning someone in Omaha need only earn $40,000 a year to have the same standard of living of someone in New York with an income of $100,000.)
Compare and contrast with all those people paying through the nose to live in a nice home in an expensive locale, or living in a shoebox, or spending 90 minutes commuting each way. Employers are now pushing everyone back to the office. Fair enough. But how about if more employers moved their offices somewhere more livable and affordable? It’s not the office that workers hate so much as the commute.
2. He didn’t waste money on stuff. Not for him the yachts, expensive cars, luxury properties or other toys of the rich and bored. Buffett seemed to understand early and instinctively what it has taken psychologists decades to conclude: That beyond a certain level, more spending will add little or nothing to your happiness. (When giving away his money, he said that spending beyond about 1% of his net worth on himself and his family would add nothing to their well-being or happiness.)
Psychologists refer to “the hedonic treadmill.” This is the futility — hence “treadmill” — of trying to achieve happiness by constantly buying more and bigger and better stuff.
The problem is that the human brain adapts to whatever we have. We get used to it. This is why lottery winners typically end up no happier years later than anyone else, and why if you visit a place where really rich people hang out — Palm Beach, Fla., or a five-star luxury hotel — and look around, you probably won’t see them all grinning madly about the fact that they are rich and marveling at all the things they can afford. But while “stuff” is costly to the rich, it’s lethal to the rest of us: That’s money we will need. The only way to beat the treadmill is to get off it.
3. He has a job he loves. From a financial standpoint, Buffett hasn’t had to work since he was in his 40s, but he kept going for another half-century — and loved it. “I’ve always worked in a job I love,” he once said. “I loved it just as much when it was a big deal if I made a thousand bucks, and I urge you to work in jobs you love.” Another time he described his job more as “play” than “work.”
This is priceless advice. Most of us will spend most of our waking hours, for the bulk of our lives, either working, traveling to or from work, getting ready for work or recovering from it. What is the dollar value of that time? It was a wise person who first observed that if you do a job you love, you’ll never work a day in your life.
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4. He has given, and is continuing to give, most of his money away. It’s almost impossible to imagine all the good that will be achieved with the hundreds of billions of dollars that Buffett has accumulated during his lifetime and that he is giving away to good causes. “Were we to use more than 1% of my claim checks (Berkshire Hathaway stock certificates) on ourselves,” he writes, “neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others.”
5. He didn’t care what the crowd thought. After more than a quarter of a century of writing about markets and finance, I’ve come to think my main expertise — possibly my only expertise — is on the subject of “popular delusions and the madness of crowds.” From ancient Greece to the COVID-19 crisis, it’s a subject that has fascinated me. And learning about it has made me especially fond of Buffett.
It wasn’t only during the dot-com bubble that he stood against the crowd’s insanity. He closed down his first partnership in the 1960s rather than join in the bubble of the “go-go years.” He invested, and publicly urged others to invest, during the epic bear market of the 1970s. He did it again during the 2008 crash. He made his money by courageously standing up against mass insanity and sticking to his principles. Bravo.
6. He’s humble. I’ve always said I don’t trust anyone until I have heard them say “I don’t know” and “I was wrong.” Buffett’s willingness to do both has been among his greatest and most profitable attributes. He has frequently emphasized that he invests only within his “circle of competence,” meaning he only invests in what he knows. And he admits there is a lot he doesn’t know.
“During the 2019-23 period, I have used the words “mistake” or “error” 16 times in my letters to you,” he wrote to stockholders in the 2024 Berkshire Hathaway annual report. “Many other huge companies have never used either word over that span.” For them, he added, “it has generally been happy talk and pictures.”
7. He’s acted like a grown-up. Can you imagine Warren Buffett standing around on a stage (in a graphic T-shirt) waving a chainsaw in the air and laughing about the middle-class jobs he was going to eliminate? Can you imagine him bragging about using bankruptcy laws to stiff his creditors? Can you imagine him running a bank so recklessly that it would end up crashing the global economy, but cashing out of his own stock before the stuff hit the fan, and then walking away with a shrug? I can’t. But I’ve seen billionaires and Wall Street tycoons do exactly those things in the recent past.
If you want to see how a billionaire should behave — in my view, anyway — watch Buffett’s remarkable statement to Congress during the Salomon Brothers hearings in 1991. There are billionaires, and then there are billionaires. We have too many of one kind, and too few of the other.
