Hope you are all doing well. Happy Father’s Day weekend to all of the Dads! U.S. stock indexes fell on Friday amid heightened anxiety in the Middle East, sending the market to a negative week overall. After recording gains the previous two weeks, the S&P 500 and the NASDAQ posted fractional weekly declines while the Dow finished down more than 1%. Even with the uncertainties around tariffs, trade and geopolitics the underlying economic numbers continued their trend this week of strong performance. GDP growth, the labor market and inflation have all been resilient thus far and all continue to trend in the right direction. Today is Flag Day, President Trump’s birthday and also Boy George’s birthday. Sorry Betsy Ross and President Trump, but I have chosen to break down this week’s update using lyrics from the Culture Club’s Karma Chameleon.
“You string along, you string along”
We are now 60 days into the 90 day tariff pause. We still don’t have pen to paper on a single trade deal.
This week we got more vague window dressing but no concrete details or formal trade agreements. Trade negotiations with China ended in what they are calling the framework of a deal. It feels like the administration is stringing along the market by saying they are close to deals but I believe in the coming weeks investors will stop taking the administration at their word if trade deals don’t get done.
“Every day is like survival”
For the past 5 months every day has been like survival for those of you who are Federal employees (Feds). Feds got good news this week. Senate Republicans realized, to paraphrase the song, Feds are not their rivals. On Thursday, a draft of the Senate’s proposed legislation was released. It does away with several provisions that would have reduced federal workers’ retirement benefits. Gone is the provision that would require all federal workers to contribute 4.4% of their basic pay toward the Federal Employees Retirement System (FERS). More importantly, the “high three” is here to stay for existing employees and so is the FERS supplement for employees who retire before Social Security kicks in at age 62.
“How to sell a contradiction”
The markets and DOGE frontman Elon Musk already scolded politicians for wasteful spending. Spending 45 million on a military parade has been criticized by people on both sides of the political aisle. We are spending much of that money on shipping in more than 90 powerful war machines, including Strykers, tactical vehicles, and Howitzer tanks from central Texas. It is seen as a contradiction spending so much on a symbolic display of military strength while neglecting areas that could improve the lives of citizens, particularly veterans. At this point however, the money is spent so I hope we rightly celebrate the men and women who serve and have served in our Army for the past 250 years. However, in future years since the President loves to have parades on his birthday, I think the organizers of the Pride parade should book Pennsylvania Ave for June 14, 2026 …. maybe the President and Boy George could be the grand marshals.
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