Summing Up The Week

The markets spent the early part of the week digesting Moody’s credit rating downgrade of United States debt and a bad Treasury auction.

It seemed as though investors had gotten used to the status quo on Thursday until President Donald Trump announced new tariffs on Friday: a 25% tariff directly on Apple (AAPL) for any iPhone not manufactured in the United States and a 50% tariff on the European Union (EU) scheduled to start on June 1st.

So, we’re at it again with Trump pointing his Big Tariff Gun at new targets.

Let’s take a look at the news that moved markets this week…

Market News

Moody’s downgrades U.S. Credit rating

Last Friday hadn’t even ended before market-moving news hit the wires after the bell when Moody’s downgraded the United States’ credit rating thanks to increasing government debt balances, reported CNBC. Moody’s Ratings cut the U.S. credit rating one notch to Aa1 from AAA on Friday pointing to the budgetary burden of high interest rates.

“This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns,” the ratings agency said in a statement.

The agency pointed to the failure of Congress and presidential administrations to get the fiscal deficit under control. “Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” Moody’s said. “We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

The last time the U.S. credit rating was downgraded resulted in a significant pullback for markets. Of course, since the U.S. is the “best house in a bad neighborhood” in terms of investors preferring U.S. bonds to buying another country’s debt, the markets recovered in a matter of months. I don’t anticipate this time will be any different – U.S. Treasurys are still the “safest” safe haven asset out there… for now.

Bad Treasury auction sends yields higher

On Wednesday, the U.S. Treasury bond auction saw low interest with dealers having to take up to 17% of the auction, a bad sign for bond-buyer appetite. Pundits point to Congress’s attempt to pass President Trump’s tax cut bill as the likely cause of rising yields, reported CNBC. On Thursday, the U.S. 30-Year Treasury rose to 5.117%, its highest level since October 2023 when the Federal Reserve was still maintaining high interest rates.

“There does seem to be a risk-off on American assets across the board, not just government debt but everything. Whether that continues into the future or not, I don’t know,” said Federal Reserve Governor Christopher Waller. “I think as long as the economy kind of gets back on a good path, the economy starts growing, inflation stays down, you might see a resurge in demand for American assets.”

April existing home sales drop to lowest level since 2009

On Thursday, existing home sales for April dropped to the slowest pace for April since 2009, falling 0.5% from March, reported CNBC. With mortgage rates raising once again and many existing homeowners having a mortgage rate under 4%, the incentive to sell their homes is still not there.

“Home sales have been at 75% of normal or pre-pandemic activity for the past three years, even with seven million jobs added to the economy,” said Lawrence Yun, NAR’s Chief Economist in a release. “Pent-up housing demand continues to grow, though not realized. Any meaningful decline in mortgage rates will help release this demand.”

Trump announces 50% tariff on EU starting June 1

On Friday, President Donald Trump brought out his big tariff gun once more, calling for a 50% tariff on the European Union (EU) to start on June 1, reported CNBC. Earlier, Trump also announced a 25% tariff on any Apple (AAPL) iPhone not made in the United States.

Trump claimed the 50% EU tariff was due to their unwillingness to negotiate. The EU “has been very difficult to deal with,” Trump wrote on Truth Social. “Our discussions with them are going nowhere!” Asked if the EU will be able to negotiate in the nine days before the 50% tariffs kick in, Treasury Secretary Scott Bessent said, “I would hope that this would light a fire under the EU.”

As one might expect, both the U.S. and European stock markets sold off following Trump’s new tariff announcement.

Next Week’s Gameplan

We enter a shortened trading week with the Memorial Day holiday on Monday, but we will still receive quite a bit of potential market-moving news.

On Tuesday, we get durable-goods orders as well as Consumer Confidence followed by the release of the  minutes of the Fed’s May meeting on Wednesday.

On Thursday, we’ll receive the first revision of Q1 Gross Domestic Product (GDP) for the U.S., but the big news comes on Friday when we get the Personal Consumption Expenditures (PCE) index, the Fed’s preferred gauge of inflation.

As if all that news wasn’t enough, Nvidia (NVDA) reports earnings after the bell on Wednesday and what it has to say will almost certainly move markets on Thursday. Also, UiPath (PATH), another of my AI holdings also reports on Thursday after the bell (although that one definitively will not move markets).

So, I’ll see you back here next Friday for what will be an interesting recap, friends!

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Crytpo Corner

Bitcoin Price Action

Bitcoin’s Back to Hitting All-Time Highs! What’s next?

Bitcoin made a higher weekly-low at $102,105.00 on Monday before continuing the epic rally that has been going strong since its April selloff low. Then, on Wednesday, Bitcoin blew away its old all-time high at $109,358.01 and didn’t calm down before it established its new all-time high at $112,000.00 on Thursday.

The Bullish Case

The Bulls have it! The last Bear narrative was that Bitcoin couldn’t possibly be in a new bull market since it hadn’t made a new all-time high, but that narrative has now been dashed. The Bulls calling for a new all-time high this week nailed the call, and all fundamental and technical analysis shows Bitcoin has momentum for higher-highs from here.

Notable analysts who I trust believe we’ll see Bitcoin reach $130K before it pulls back and offers another buying opportunity for the FOMO crowd (although, of course I am always hoping for huge pullbacks to add to my stacks).

The Bearish Case

Bears are left licking their wounds after having Bitcoin stuff all their narratives right down their throats. While there’s always a possibility for Bitcoin to pull back significantly after such a run, it’s hard to come up with any Bear narrative to explain such a reversal. This is especially the case since Bitcoin has now decorrelated from stock market once more, perhaps indicating appetite for it as a safe haven asset.

Bitcoin Trade Update

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Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use my Gemini referral link to open an account.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.

While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are some of Bitcoin’s price movements over the past couple of years:

• In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
• Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
• In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
• In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
• In February 2020, Bitcoin rallied +64% to $10,522.51.
• In March , Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
• Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
• Later in January 2021, Bitcoin dropped -32% to a low of $28,732.00.
• In February, Bitcoin rallied +103% to a new all-time high of $58,367.00.
• Later in February, Bitcoin dropped -26% to a low of $43,016.00.
• In April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
• In June , Bitcoin crashed -56% to a low of $28,800.00.
• In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
• In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
• In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
• In June, Bitcoin dropped -20% to a low of $24,750.00
• In July, Bitcoin rallied +29% to a high of $31,862.21.
• In September, Bitcoin dropped -22% to a low of $24,900.00.
• In January 2024, Bitcoin rallied +97% to a high of $49,102.29.
• Later in January, Bitcoin dropped -22% to a low of $38,501.00.
• In March, Bitcoin rallied +92% to a new all-time high of $73,835.57.
• In August, Bitcoin dropped -33% to a low of $49,050.01.
• In January 2025, Bitcoin rallied +150% to a new all-time high of $109,358.01.
• In April, Bitcoin dropped -32% to a low of $74,420.69.
• In May, Bitcoin rallied +51% to a new all-time high of $112,000.00.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.