News and analysis

There is a time to cast away stones, and a time to gather stones together. This important scriptural truth applies not only to eternal matters of a human heart and a human soul, threats of world wars or efforts of building a peaceful and better future, curses or blessings transmitted, but also to a lot of prosaic nuances of material life, including market situations In certain circumstances as well. Many of the stones that we generously casted away earlier this spring in the form of investments can now be collected and gathered together to form an exclusively profitable composition.

In particular, I should mention here Texas Instruments (TXN), a chipmaker, which I collected for my personal investment portfolio at $165 per share after a very impressive earnings report only three weeks ago, being very confident in its growth prospects. That time, I pointed to a minor downtrend line between $190 and $195 as the lowest medium-term target (see the chart from April 24, which I reproduce here again). The TXN price rally of 14% to $188 has already happened, and I see the point in taking profits on at least 2/3 of the initial trade size, leaving the remaining 1/3 for targets above $200 if higher price peaks would be reached later. Among my darling assets that I have written about more than once as integral parts of my trading strategy, I would mention Tesla (TSLA), Broadcom (AVGO), Meta Platforms (META) and, of course, Amazon (AMZN), which I have characterised many times as more promising than Apple (APPL). As one can see, Apple fell down worse than many others, but also bounced significantly on the news of Trump's deal with China. However, I still trust Apple's future returns less than in cases of Amazon and all other tech giants listed above.

Even though my ultimate price targets for Amazon are definitely well above $250, I am still going to collect some of the stones before the end of this week (selling half of previously opened positions), at around $210 each, or maybe little better if possible, since current price ranges may persist here for a long time. And I'll definitely do the same thing with my Broadcom (AVGO) stake, as the recent rally to $235 from very deep lows of around $145 just in early April looks like maybe overperforming to some extent, and past historical highs are looming just above $250. As for Meta and Tesla investment cases, I will not get rid of any shares for now, and will hold the entire purchases in reserve until even better times, since targets of over $750 for Meta and at least $450, if not $500, for Tesla are still a long way off. We could also talk about crypto stories, but this is probably worth dedicating a separate article.

All that panic was clearly for naught four or five weeks ago, but I was never worried. Wise people should buy lows at such moments. Trump-tracking trade never fails. Successively cutting through the noise like tariff and recession fears, our common sense guided us with clear recommendations to buy what was temporarily cheap yet of good quality, thanks to a solid fundamental ground behind those assets. That was also a process of separating proper wheat from the chaff, in other words, so that in the light of the bullish momentum it became much more clear which stocks were actually worthy of picking up and which were rightly left aside with their delayed growth. Well, if you were by my side in this spring market, then all of us have made very good money on picking up Wall Street favourite stocks. Anyway, everyone has made his or her own conclusions for the coming months. Me too, and so I am going to continue sharing conclusions and fresh trading ideas of mine here, with your kind permission, of course.

Monero (XMR) is up 2.0% this week to $341, outperforming the broader crypto market, where Bitcoin (BTC) is down 0.7% to $103,450. XMR is benefiting from the overall positive market sentiment driven by the progress in U.S.–China trade negotiations, which has lifted risk assets across the board. Privacy-focused tokens like Monero have gained further traction following a recent legal victory that effectively safeguarded their status and ability to operate, placing XMR in a stronger position within the market.

The token surged by 41% to $324.9 on April 27 amid speculation that a large cryptowallet containing 3,250 BTC — approximately $330 million — had been compromised and the funds converted into XMR. Although a brief pullback followed that sharp rally, Monero’s continued rise suggests growing demand for privacy and anonymity in digital transactions. This narrative is helping sustain upward momentum in XMR, as investors increasingly seek alternative assets that prioritise user confidentiality.

The core of the dynamics for the U.S. Dollar against a basket of other major world currencies remains more complex than the direction of the stock market, where bullish sentiment is now evident. The surge of speculative buying interest to shift more money into the Greenback right the day after the weekend news of the breakthrough between the United States and China had partially subsided by Tuesday. USDJPY quickly jumped from around 145 to above 148 but stopped and retraced from there. Similar patterns are now at NZDUSD and AUDUSD charts. And only the EURUSD case looks more or less simple. The reason here lies deeper than trade contradictions.

After the U.S. Federal Reserve (Fed) meeting ended in vain last week, foreign exchangers are not even quite sure about the launch of borrowing cost cuts even in June. Fed's head Jerome Powell and his comrades stubbornly insisted on uncertainty about the inflation prospects, also citing strong labour data. and they may not immediately become more accommodating during the early stages of the road to concluding trade deals, even though things are clearly getting better with China and the U.K. trade deals, but there is really little clarity in Trump's relations with the European Union, where tariff threats are also his instrument of pressuring on Brussels in approaching Ukrainian peace. The FedWatch Tool now shows more than 90% confidence among futures traders that U.S. interest rates will remain unchanged within the range of 4.25%-4.50% after June 18, but only about 40% bet that Jr Powell will meet Trump's demands to lower rates on July 30. 80% investors feel that the rate cut will begin in September, that's all that we have as given, even if such a rate cut delay would be detrimental to the national and world economy.

Hence, the growing doubts among the market community on whether to buy the U.S. Dollar on this path or better to hold off on immediate decisions are reasonable, at least for commodity-based currencies. The outlook is also unclear with further trade levies against Japanese cars, and this may hint USDJPY from explosive growth, but probably allow the pair to hit slightly above the 150 big figure. As for the interest rate differential with the Euro, if rates in America are lowered in July rather than in June, or even in September, this potentially gives the Greenback a boost, or leaves it just as strong as it is, while European positioning is suppressed by trade troubles.

Meanwhile, and even because of reasons listed above, the prospect of much faster rate cuts in Europe is growing. This makes the single currency an easy target for short-selling at the first convenient opportunity. This EURUSD selling intention may not manifest itself immediately, given the mixed expectations of how exactly the adjustment of trade balances with an increase in the share of American exports to rival countries will affect the U.S. Dollar exchange rate against the currencies of non-EU countries. However, we do not see EURUSD above 1.15, or it may only go there on a wave of some short-term and new-based momentum, while a step-by-step slide down to 1.08 and below looks like a given and only a matter of patience. The EURUSD was treading water around 1.1350 for many days, but quickly slid to 1.1065 this Monday after the U.S.-China deal announcement, but has quickly bounced back to 1.1135 by European lunchtime today.

Pure fundamentally, we agree with Deutsche Bank's current outlines on two possible paths for the European Central Bank's (ECB) interest rates. The ECB is "tipped to slash" borrowing costs at least three more times this year to bring its key deposit rate down to 1.5% by the end of 2025, Deutsche Bank said, while mentioning "two-sided risks" to this estimate. In one scenario, the implementation of "partially-delayed" U.S. tariffs may lead to a "growth shock" in the Eurozone, causing the ECB to bring policy rates below the 1.5% level. Another scenario revolves around broader economic "resilience" to halt an ongoing ECB rate easing cycle before borrowing costs dip to 1.5%. But the baseline idea for the ECB to cut rates by 0.25% in June, September and December. Yet, threats to bond markets after Trump's first announcement on tariffs in early April, there is a chance that the tariffs could be "disinflationary" in the Eurozone, so that the ECB's 1.50% terminal rate might be reached already in September, Deutsche Bank said. Last month, the ECB cut interest rates once again in order to save the EU's economy facing substantial weakness. ECB policymakers noted that both headline and core inflation declined, while the EU services sector's recent price gains also cooled over recent months.

One more clearly palpable proof that all those tariff-driven dips on Wall Street were nothing else than splendid buying opportunities. Our analyst team proclaimed a great time to buy throughout the whole month of April often and loudly so that your ears probably became stuffed with our bullish estimates. But now the fairness of these predictions is finally confirmed as a fact. The uptrend in global stocks has already resumed slowly but steadily, with some newly emerged details about the Sino-U.S. trade deal breakthrough generously slathering of icing on this cake after the weekend.

The general terms of behind-the-scenes talks between Washington and Beijing have ultimately come to light, and the U.S.-U.K. agreement was actually concluded just a few days ago. This had an immediate impact, so that the tech-heavy Nasdaq Composite index closed on Monday, May 12, with a 4.35% of daily gains, while the broader market S&P 500 barometer added 3.26% within 24 hours to climb more than 1,000 points higher compared to its early April lows, approaching to 5,850 after plunging to nearly 4,800 just a few weeks ago. The performance of individual megacaps looked even more convincing. The e-commerce platform and cloud capacity provider Amazon (AMZN) soared by 8.07%, the owner of Facebook and Instagram Meta Platforms grew by 7.92%, with the electric car flagship Tesla (TSLA) adding 6.75% only this Monday. The iPhone maker Apple (APPL), which is heavily dependent on assembly in China, recovered by 6.31%, and dominant AI chip manufacturer NVIDIA (NVDA) bounced by another 5.44%.

When it comes to specifics, basically everyone probably read the news that the two great nations, the U.S. and China, said in a rare joint statement on their moving to cut Donald Trump’s so-called "reciprocal" import tariffs on China goods from impossible 145%, effectively amounted to a trade embargo, to quite normal 10%, even though his first term's 20% tariff related to Beijing’s alleged role in the flow of the illegal drug fentanyl remains in force. Meanwhile, China's levies on U.S. imports are being cut from a recent spike to as high as 125% to 10%. More negotiations are surely planned, while both sides may conduct working-level consultations on relevant economic and trade issues, the countries said. The U.S. Treasury Secretary Scott Bessent commented during a news conference that there is now a "good mechanism" to avoid any further ratcheting up in tensions but the main thing is that "neither side wanted a decoupling". Jamieson Greer, the U.S. trade representative who was also present at the discussions, said that the differences between the two nations were not as significant as previously assumed, being confident that "the deal we struck with our Chinese partners will help us to work toward resolving" on the trade deficit issue.

It is clear that the voice of the Chinese side is still heard weaker than the boasts of officials from Trump's team, but there is no doubt that there will be words of response from Beijing as well. China will probably have to agree to buy more goods like soybeans or heating oil from America to improve the trade balance disgrace, and also agree on how to legally purchase proper chips for AI, as well as tighten controls on fentanyl smugglers. In the meantime, global suppliers are trying their best to get as much cargo from China as possible, while the 90-day trade truce is still in effect for sure, and so world trade has immediately picked up.

However, even if more precise agreements will be postponed or suspended for some time, and would become weaker than initially announced, so that the mutual tariff levels may be not as convenient as many expect after Bessette's words, for example, then this can only partially affect the rising trajectory of Wall Street assets, but not their final destination at more than 6,500 or even 6,850 points which is another 1,000 points higher than even current quotes. We also estimate the fundamental foundation of this skyward rush on Wall Street as even more solid in light of observations that even before the apparent clarification with trade deals, the rise continued unabated after a relatively hawkish stance of the U.S. Federal Reserve on May 7, which was unable to significantly curb the ascending sentiment.