Summing Up The Week

No amount of fundamental data or analysis can protect an investment against geopolitical risks. The “known unknowns” will always take markets lower, sometimes as much as “unknown unknowns.”

Despite positive news on trade deals with China and lower-than-expected inflation results which sent stocks higher, Israel’s attack on Iran late Thursday evening sent the stock market reeling on Friday.

Let’s take a look at the news that drove the markets higher… and lower… over the course of the week…

Market News

China-U.S. Trade Talks Drive Markets

The markets followed closely as U.S. trade officials and Chinese counterparts met in London early in the week for trade talks, reported CNBC. The markets saw a muted close on Monday after Commerce Secretary Howard Lutnick’s promises for a “quick talk followed by a strong handshake” ended up being more than eight hours of meeting with no result and a promise to return on Tuesday.

Naturally, President Donald Trump claimed the dogs were going well and that he was “only getting good reports” in response to a Reuters reporter in a press conference Monday afternoon. Trump’s renowned vagueness with veiled optimism regarding any ongoing negotiations had become commonplace to investors during the administration’s first term so it’s par for the course in the second term.

On Wednesday, Lutnick announced that U.S. tariff levels on China would not change from this point forward, reported CNBC. After Trump posted on Truth Social that U.S. tariffs on China would total 55%, Lutnick clarified that the stated amount is the existing 30% blanket tariff combined with 25% tariffs on specific products, not a new tariff amount.

Inflation rose 0.1% in May from April, less than expected

On Wednesday, May’s Consumer Price Index (CPI) showed inflation only rose 0.1% month-over-month, less than the 0.2% expected by Dow Jones economists, reported CNBC. The ongoing weakness in energy prices led to the lower inflation, experts said, as oil prices remained low throughout the month.

Economists continue to remain cautious about the potential effects of Trump’s tariffs. “Today’s below forecast inflation print is reassuring – but only to an extent,” said Seema Shah, Chief Global Strategist at Principal Asset Management. “Tariff-driven price increases may not feed through to the CPI data for a few more months yet, so it is far too premature to assume that the price shock will not materialize.”

PPI shows wholesalers not experiencing inflation from tariffs

On Thursday, the Producer Price Index (PPI) came in at 0.1% in May versus expectations for 0.2%, indicating that inflation isn’t dramatically affecting wholesale prices, reported MarketWatch.

With repeated tame inflation reports, the Federal Reserve could use this data as evidence of the need for additional interest rate cuts. However, as Chair Powell has said repeatedly, the Fed will need repeated strong evidence before considering a rate cut. The Fed does not want to be in a place where they cut rates, inflation resurges, and they need to hike rates again to battle it.

Trump threatens unilateral tariffs on trading partners in 2 weeks

On Thursday, President Donald Trump double-down on his tariff deadline, threatening unilateral tariffs on the U.S.’s trading partners in two weeks, reported CNBC.

Despite progress apparently being made between the United States and China along with the U.K. and E.U., Trump is not pleased with the results of trade talks with other countries.

In fact, Trump believes extensions won’t be necessary. “I don’t think we’re going to have that necessity. We made a great deal with China,” Trump told reporters. “We’re dealing with Japan, we’re dealing with South Korea. We’re dealing with a lot of them. So we’re going to be sending letters out, in about a week and a half, two weeks, to countries, telling them what the deal is, like I did with EU.”

Israel launches airstrikes on Iran

On Thursday evening, Israel launched a series of airstrikes on Iran, escalating the ongoing conflict between the two nations, reported CNBC. Geopolitical risk constitutes an “known unknown” for markets – we are always aware that geopolitical risk is out there, but we have no real to quantify its effects on markets until after it happens. And the result is never good…

Mohammad Hossein Bagheri, chief of the Iranian Armed Forces and the country’s most senior military official, was killed during the strikes, alongside the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps, Hossein Salami, Iranian state media reported.

The Israeli airstrikes also targeted and killed two of Iran’s leading nuclear scientists, Fereydoun Abbasi-Davani and Mohammad Mehdi Tehranchi, according to Iranian news outlets.

To no one’s surprise, Iran has promised vengeance for the attacks. “With this crime, the Zionist regime has brought a bitter and painful fate upon itself, and it will certainly face it,” said Ali Khamenei in a statement.

As a result, the markets pulled back substantially on Friday as high tensions in the Middle East are never good for anyone – in or out of the markets.

Next Week’s Gameplan

Next week is another shortened week as markets will be closed for the Juneteenth holiday on Thursday. However, we’ll still be getting a lot of news.

While this week revealed about the consumers’ sentiment, next week we’ll get to see the consumers’ actions with the retail sales report on Tuesday. Additionally, we’ll get a bit of an update on the health of the housing sector with the home builder confidence index also on Tuesday followed by housing starts on Wednesday.

The key news catalyst also comes on Wednesday in the form of the Federal Reserve meeting and decision on whether to cut interest rates or leave them be followed by Fed Chair Jerome Powell’s press conference in the afternoon. Watching the price action will be interesting with Thursday being a holiday as the markets usually take a day to process the release; will Friday be particularly volatile?

Regardless, I’ll meet you back here next Friday to go over all the market’s ups and downs, friends!

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Crytpo Corner

Bitcoin Price Action

Support holds Bitcoin despite geopolitical risk. Are higher-highs or lower-lows ahead?

Bitcoin appeared to be making a strong recovery to kick off the week, rallying from last near weekly-lows last Friday, breaking through last week’s high of $106,901.68, and almost testing resistance at $110,829.42 before retreating. Bitcoin set a higher-weekly high at $110,651.12, just barely missing that key resistance level set a few weeks ago.

On Wednesday and Thursday, Bitcoin started to pull back quite a bit on the back of Trump’s announcement of enforcing unilateral tariffs on countries who aren’t having “good-faith” trade negotiations with the U.S.

Bitcoin pulled back further when Israel attacked Iran on Thursday evening, setting its weekly-low at $102,746.01, still a higher low than last week’s.

The Bullish Case

Bulls point to Bitcoin’s continued strength above $100,000 as a reason the momentum favors a Bull Market. Strong buying remains even at these levels near all-time highs, and that kind of buying is certainly positive for the bullish thesis.

The Bearish Case

Bears point to the double-top around $110K as a warning sign for Bitcoin waning. Bears look to the past where Bitcoin often makes a key low and tests it three times before crashing through it. Looking at the charts, that key low could be the $100K mark. If Bitcoin sells off and retests it again, it’s possible Bitcoin could be headed lower with the $91,685.18 support level potentially in play.

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.