General Market News

Federal Reserve Governor Stephen Miran has resigned effective upon Kevin Warsh's swearing-in as the new Fed chair. Miran, who served briefly on the Fed board since September 2025 after leaving his role as Trump's Council of Economic Advisors chair, cited conservative regulatory victories including the removal of 'reputational risk' guidelines and freeing up over $100 billion in bank capital.

• Miran championed removal of 'reputational risk' banking guidelines he claimed were used to impose political preferences on issues like firearms and fossil fuels onto bank customers
• Working with Vice Chairwoman Michelle Bowman, Miran helped slash regulatory requirements that freed over $100 billion in capital, allowing banks to extend more credit without penalties for holding safe assets like U.S. Treasuries
• Kevin Warsh, 56, was confirmed by the Senate as the next Federal Reserve chair, replacing Jerome Powell whose term expires Friday

Federal Reserve Governor Michael Barr rejected proposals to ease bank liquidity requirements as a means to shrink the Fed's balance sheet, warning such moves could undermine financial stability. His comments come as the Fed may shift policy direction under likely incoming Chair Kevin Warsh, who has criticized the central bank's large asset holdings. The Fed's balance sheet currently stands at $6.7 trillion, down from a pandemic peak of $9 trillion.

• Barr argued that lowering liquidity rules would increase banks' reliance on Fed emergency facilities and could threaten financial stability, noting that 2023 bank stresses suggest requirements 'should go up and not down'
• The Fed's balance sheet grew to $9 trillion during the pandemic and has since been reduced by over $2 trillion to the current $6.7 trillion through quantitative tightening efforts
• Incoming Chair Kevin Warsh has advocated for a smaller Fed balance sheet and suggested that shrinking holdings could allow lower interest rates, a view that contrasts with Barr's emphasis on maintaining the current monetary policy framework

LNG Canada and its partners, led by Shell, plan to make a final investment decision on a proposed phase 2 expansion by end of 2024, according to Canada's Natural Resources Minister. The expansion would double the facility's current 14 million metric tons per year capacity. Shell has already approved hundreds of millions in incremental funding to advance critical work needed for the decision.

• The expansion would double LNG Canada's capacity from 14 million metric tons per year to 28 million metric tons annually
• Shell and partners approved hundreds of millions (CDN) in funding on May 1 to finalize engineering, First Nations agreements, supply chain work, and marine terminal construction
• The Kitimat, B.C. facility began operations in June 2025 but exceeded regulatory flaring limits in multiple months during startup, which the CEO said is normal for new LNG facilities

Global stock markets hit fresh record highs on Thursday, driven by a relentless tech rally amid a U.S.-China summit in Beijing. However, market leadership remains extremely narrow, with nearly 50% of April returns generated by just 13 AI-related stocks out of 4,250 in the FTSE All-World index. Meanwhile, U.S. borrowing costs are spiking at the short end of the curve, raising concerns for Treasury debt management.

• Only 53% of S&P 500 stocks are above their 200-day moving average versus the typical 77% when the index hits record highs, indicating weak market breadth that Goldman says can persist 'for months'
• Asian tech giants are flexing muscle as SK Hynix nears $1 trillion market cap and TSMC ramps up capacity, with all three major chipmakers serving the 'Mag 7' U.S. tech companies
• UK political instability emerged as Health Minister resigned and called for leadership contest against PM Starmer, though UK markets showed no clear 'sell UK' signal with falling gilt yields

Market expectations have dramatically shifted from two rate cuts at the start of the year to a 34% probability of a rate hike by December 2025, following CPI hitting 3.8% and PPI reaching 6.0%. Investor Louis Navellier disagrees with this outlook, arguing that current inflation is driven by temporary energy shocks from the Iran conflict rather than structural problems, and that AI-driven productivity gains will provide deflationary pressure.

• Navellier believes energy-driven inflation is temporary and resolvable, noting Iran's oil infrastructure damage creates incentives for conflict resolution, while AI productivity gains represent a structural deflationary force not yet captured in current data
• Treasury Secretary Scott Bessent and incoming Fed Chair Kevin Warsh share this 'Team Transitory' view, with Warsh planning to cut rates while shrinking the Fed's $6.7 trillion balance sheet later in the year
• Historical patterns show smaller-cap domestic stocks significantly outperform during Fed rate-cut cycles, with past examples including Cisco gaining 2,062% in 1995 and MARA Holdings rising 1,800% in 2020

RiverFront Investment Group examines how concentrated stock positions create significant portfolio risks and proposes covered call strategies as a solution for gradual diversification. The article highlights that single-stock portfolios carry volatility near 47% versus under 9% for diversified 20-stock portfolios, while tax implications and emotional attachments complicate liquidation decisions. Covered calls allow investors to swap future upside for immediate income, which can fund systematic diversification or offset capital gains taxes.

• Research shows diversifying from one stock to 20 stocks reduces expected portfolio risk from 47% to under 9%, though historical examples (Citi returned -5.6% annually 2005-2025 vs S&P 500's 17%) demonstrate underperformance risk even for 'winners' like Exxon (13.3% annually).
• Covered call strategies generate income by capping stock upside at a strike price, with premiums used either for dollar-cost-averaging into diversified holdings or offsetting capital gains taxes during a 10-15 year transition timeline.
• Strike price selection controls transition pace: closer-to-the-money options generate higher premiums and faster diversification but increase call-away probability, while further-out strikes preserve more upside and reduce assignment risk.

Four prominent RIA CEOs convened at a Goldman Sachs forum to assert that growth in the independent advisory sector is accelerating, driven primarily by clients independently leaving banks and brokerages rather than just advisor breakaways. The leaders highlighted a looming talent shortage and the rising importance of emotional intelligence as AI standardizes portfolio management. They emphasized that the migration from traditional firms to RIAs remains a one-way street with no reverse trend.

• Of $400 billion that moved from banks to independent channels last year, $300 billion came from clients independently seeking fiduciary advisors (4x larger than breakaway advisor movement)
• A projected 100,000-advisor shortage combined with a 50% drop in CPA exam participants over 5-8 years is creating structural advantages for scaled RIA platforms
• As AI standardizes investment decisions and portfolio management, advisors' value is shifting toward emotional intelligence and psychological guidance rather than investment selection

Bond market signals suggest the Federal Reserve is behind the curve on inflation as Kevin Warsh takes over as Chair. The 10-year Treasury yield exceeding the federal funds rate indicates investors believe current rates are too low to control inflation, which has run above the Fed's 2% target for five years.

• April CPI showed the highest inflation rate since 2023, while wholesale inflation hit its fastest pace since 2022, complicating Warsh's outlook amid the Iran War impact
• Ed Yardeni of Yardeni Research says removing the Fed's easing bias may not be enough, and the central bank may need to signal willingness to hike rates
• Fed funds futures traders are pricing in no rate cuts for 2026, with the likelihood of rate hikes increasing despite Trump's pressure for lower borrowing costs

Kalshi traders now see a nearly 40% probability of stagflation (high inflation and unemployment occurring simultaneously) hitting the U.S. economy by the end of 2026, up sharply from 11% three months ago. This pessimistic shift follows April's CPI reaching 3.8% year-over-year and wholesale prices hitting their highest levels, while unemployment has remained above 4% since May 2024. Meanwhile, the probability of a soft landing has plummeted to just 21%, the lowest of all economic scenarios tracked.

• Stagflation probability surged from 11% to nearly 40% in just three months on Kalshi's prediction markets, reflecting growing concerns about simultaneous high inflation and unemployment
• Kalshi traders predict inflation will reach at least 4.5% in 2026, significantly higher than FactSet's consensus forecast of 2.8%
• Soft landing probability collapsed from 55% in early March to only 21% currently, now the least likely economic outcome according to traders

Federal Reserve Governor Stephen Miran submitted his resignation Thursday, effective when Kevin Warsh assumes the Fed Chair position. Miran served a brief term starting September 2025, consistently dissenting on rate decisions during his six FOMC meetings. He endorsed Warsh and expressed support for policy changes including improved communications, balance sheet reduction, and keeping the Fed focused on its core mandate.

• Miran voted against all six rate decisions during his tenure: opposing three quarter-point cuts in 2025 and three holds in 2026, consistently advocating for lower rates
• He supports Warsh implementing changes in Fed communications, balance sheet policy (currently $6.7 trillion in assets), and avoiding political and cultural issues
• Miran previously served as Chair of the Council of Economic Advisers and filled an unexpired term after Adriana Kugler's departure in August 2025

Short sellers are targeting companies perceived as artificially latching onto the AI boom through rebranding and questionable claims, betting that speculative excesses will eventually unravel. Fact Capital and other bearish investors are screening for firms that suddenly changed names to include 'AI' or made dubious pivots to capitalize on market enthusiasm. The strategy comes as billions flow into AI-related stocks, with some drawing parallels to the dotcom bubble.

• Fact Capital founder Joyce Meng identifies 'fake AI' stocks through screens detecting abrupt name changes and business pivots, citing examples like struggling shoemaker Allbirds pivoting to compute infrastructure (stock initially surged 582% before giving back most gains)
• Culper Research disclosed a short position in Nvidia, alleging over 20% of fiscal 2026 compute revenue remains tied to China through illegal GPU diversion despite export restrictions, though Nvidia claims China business dropped to zero
• Prominent short sellers including Jim Chanos draw parallels to the dotcom era, noting that while transformative technologies like railroads and the internet changed the world, many early companies went bust and aggregate economic growth remained little changed

President Donald Trump disclosed at least $220 million in financial transactions involving major U.S. corporate securities during the first three months of 2026, according to ethics filings released May 14. The filings show purchases and sales of securities linked to companies including Microsoft, Meta, Nvidia, Apple, Amazon, and major banks, with cumulative transaction values ranging between $220 million and $750 million. The disclosures do not specify exact amounts, account details, or who executed the trades.

• Large purchases ($1-5 million each) included an S&P 500 Index fund, Nvidia, and Apple; large sales ($5-25 million each) included Microsoft, Amazon, and Meta
• Trump's assets are held in a trust controlled by his children, and some transactions indicate a broker acted as agent, though filings don't clarify who placed trades
• Federal ethics rules require disclosure of transactions above $1,000 but only in broad value bands without exact prices, profits, or indication of direct versus managed account purchases

Kevin Warsh was confirmed as the 17th Federal Reserve Chair by a narrow 54-45 Senate vote on Wednesday, taking over Friday when Jerome Powell's term ends. The former Fed governor (2006-2011) inherits an economy with strong markets and AI-driven growth but faces persistent inflation that has remained elevated for five consecutive years, while consumer sentiment sits at recession-level lows despite solid employment.

• Warsh received the narrowest confirmation vote for a Fed chair in modern history, with only one Democrat (Senator Fetterman) joining all Republicans in support
• President Trump has publicly pressured for rate cuts, but recent April inflation data showing renewed price pressures complicates Warsh's previous arguments for lower rates
• Warsh takes office amid unusual strain on Fed independence, including a pending Supreme Court case on whether Trump can fire Fed Governor Lisa Cook and Powell remaining on the Board due to alleged White House threats

Prediction markets have become retail investors' latest speculative vehicle, with monthly notional volume surging since the 2024 presidential election and now rivaling leveraged ETPs. Total volume on leading platforms Kalshi and Polymarket reached over $24 billion as of April 2025, up from less than $5 billion a year prior, though still far behind the $57 trillion in S&P 0DTE options.

• Prediction market monthly volume is now comparable to high-risk leveraged exchange-traded products and index call overwrite strategies as of 2025
• Sports contracts dominate prediction market activity on both Kalshi and Polymarket, with the majority of volume focused on non-economic outcomes
• Nearly one-third of Gen Z and almost a quarter of millennials are currently participating in or considering prediction markets and sports betting, according to recent survey data

Goldman Sachs identifies an unusual 'up crash' dynamic in tech stocks where implied volatility remains elevated despite record rallies, a pattern seen only four times in the past decade. The positive correlation between the Nasdaq 100 and its 1-month call options historically precedes further gains, averaging 2.7% returns in the following month. However, the last similar occurrence in 2017 preceded the 'Volmageddon' volatility spike in early 2018.

• The S&P 500 has rallied 7% since mid-April while the VIX remained stable below 18, driven by aggressive call-buying in tech stocks and broad-market hedging
• The current 0.4 correlation between Nasdaq 100 and its call options is the highest since January 2017, when stocks rallied 20% (S&P) and 32% (Nasdaq) that year
• Goldman notes this pattern historically yields 2.7% average monthly returns versus 1.5% typical returns, though the 2017 instance was followed by the 'Volmageddon' event when VIX spiked to 50

U.S. spot Bitcoin ETFs experienced their largest single-day outflow in three months, losing $635 million on May 13, with BlackRock's IBIT alone accounting for $284.69 million. The exodus was triggered by hotter-than-expected inflation data (April CPI at 3.8% and PPI at 6%), the hawkish confirmation of Kevin Warsh as Fed Chair, and Bitcoin's repeated failure to break above the $82,000 resistance level.

• Cumulative ETF outflows reached $1.26 billion over five trading days, reducing total net inflows since January 2024 from $59.76 billion to $58.5 billion
• Rate-cut expectations evaporated as CME hike odds climbed to 39% and Polymarket now prices 62% odds of zero rate cuts in 2026, reversing the macro tailwind that drove Bitcoin's spring rally
• The CLARITY Act markup on May 14 at 10:30 AM ET represents the next major catalyst, with Polymarket pricing 73% passage odds and Citi projecting a $143,000 Bitcoin target tied directly to the bill's passage

U.S. M2 money supply has rebounded to $22.7 trillion, representing a 47% increase since January 2020, raising concerns that the Federal Reserve may be fueling an asset bubble despite maintaining restrictive interest rate rhetoric. Major asset classes including stocks, Bitcoin, gold, and real estate continue reaching elevated levels even with rates above 3.5%, suggesting liquidity conditions remain looser than Fed policy implies.

• M2 money supply grew from $15.4 trillion in January 2020 to $22.7 trillion currently, adding roughly $7.3 trillion in liquidity to the financial system over six years
• Nvidia's $5.5 trillion market cap on $216 billion in revenue and the Magnificent Seven tech stocks' combined $23 trillion valuation exemplify how liquidity-driven multiples may be outpacing fundamentals
• Federal deficit spending exceeded $1.8 trillion in fiscal 2025, with Treasury issuance potentially offsetting quantitative tightening efforts and maintaining abundant liquidity despite higher interest rates

US retail sales rose 0.5% in April 2026, driven largely by a 2.8% surge in gasoline receipts, demonstrating consumer resilience despite elevated energy costs and weak confidence. ING Economics warns that much of the growth reflects higher prices rather than volume increases, and expects spending pressure to build in the second half of 2026 as high energy costs and muted wage growth erode purchasing power.

• Mixed category performance: gasoline (+2.8%), sporting goods/electronics (+1.4%), and online sales (+1.1%) rose, while autos (-0.4%), furniture (-2%), and clothing (-1.5%) declined
• Import prices jumped 1.9% monthly with industrial supplies surging 6.7% amid higher shipping costs; jobless claims rose to 211,000 from 199,000 in a 'low hire, low fire economy' with weak wage growth
• ING expects energy prices to remain elevated through 2026 due to global inventory rebuilding and Middle East supply risks, threatening consumer spending resilience in the second half

Treasury Secretary Scott Bessent predicts 'substantial disinflation' is coming after one or two more hot inflation reports, as Kevin Warsh prepares to take over as Federal Reserve Chair from Jerome Powell. Bessent attributes recent inflation spikes to supply shocks from the Iran conflict and expects easing as U.S. oil production increases, though April data showed consumer prices up 0.6% and producer prices surging 1.4%.

• April inflation data showed consumer prices rose 0.6% monthly with 12-month inflation at 3.8%, while producer prices jumped 1.4% to reach 6% year-over-year, the highest since late 2022
• Bessent distinguishes current inflation from the 2021-22 surge, citing temporary supply shocks from Iran conflict rather than pandemic-era demand imbalances and monetary stimulus
• Kevin Warsh will become Fed Chair as Powell's term ends Friday, with Bessent expressing optimism that energy inflation will decline as the U.S. increases oil production

A financial analysis emphasizes that successful investing comes from holding positions long-term rather than frequent trading, citing Jesse Livermore's century-old wisdom that 'sitting' not trading generated his profits. The article argues that while markets and media focus heavily on transactions and trades, portfolio performance is typically driven by pre-existing holdings and overall portfolio tilts rather than individual buy/sell decisions.

• Portfolio context matters more than individual trades: decisions like trimming gold at $3,700/oz (now much higher) are often driven by rebalancing oversized positions rather than market timing or directional bets
• Overall portfolio exposures and tilts have greater impact on performance than specific transactions, as most gains come from positions held since inception rather than recent trading activity
• Media and investors disproportionately focus on 'hero calls' and what famous managers are buying or selling, despite these transactions often being incremental portfolio adjustments rather than market predictions