This Week in Barrons: 6.1.2025

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• “I have succeeded” … said Anduril founder Palmer Luckey.  In 2017, Mark Zuckerberg (pictured on the right) fired Palmer Luckey (on the left) after buying his company – Oculus VR for $2B.  Now, Meta and Anduril (Palmer’s’ new company) have partnered on a $100m military contract for VR devices that will: boost a soldier’s senses and control AI weapons.  [FYI: What can possibly go wrong?]

• This is ‘Just Right’…  Pop songs are 200 seconds long because the vinyl properties of the old 78 and 45 rpm records could only deliver one song with decent fidelity of that length.  Sitcoms are 30 minutes long because two sitcoms an hour maximizes the possible ad revenue.  Per Seth Godin: Changes in technology have caused the last 3 media, distribution, and consumption cycles.  Most recently:

  - Podcasts changed the length of interviews,

  - LinkedIn changed the length of a resume, and

  - YouTube & TikTok changed the length of a funny video.

• Before you PLAN, ask ‘WHO’… In the theatre, the play is written before casting begins – giving the playwright the ultimate freedom and responsibility.  Writing for a sitcom is a lot easier because the cast is already set, but also more difficult to find a breakthrough.  Strategic plans for organizations are a lot like scripts, but do we ever ask which NEW characters are we planning to hire?  If we’re simply using the assets and individuals we already have, our freedom to innovate is limited.  [FYI: Define your cast, before you write the script.]

• Our government is making a significant pivot in their economic policy… from a focus on cutting government spending to an obsession with growth at all cost.  Charlie Bilello points out that this change is coming at an interesting point in time as: “The U.S. Money Supply hit an all-time high in April for the first time in 3 years. So, money printing is back.” Bitcoin is sensitive to global liquidity, and bitcoin balances on exchanges and on OTC desks are at all-time-lows.  Per Anthony Pompliano, “Fewer Bitcoin are available for sale at the same time central banks are firing up their money printers.  We will see more fiat chasing fewer coins.  Which means that bitcoin’s price will need to rise to accommodate everyone.  We have seen this before in bitcoin’s history, but it never gets old.”

• In crypto, per Stocktwits:

  - When Bitcoin hit six figures… everyone decided to take a nap rather than trade.  Quiet markets, strong hands, and super bullish on-chain metrics prevail.

  - June is Bitcoin’s 3^rd worst performing month… with an average return of 7%.

  o If June moves higher… it averages a 22% increase.

  o If June moves lower… it averages a 15% decline.

  o But, June moves higher… only 60% of the time.

• Surprise #1: If you are into portfolio diversification … new data shows that concentrated portfolios with long-time horizons drastically outperform those who choose to diversify (see the above chart).

• Surprise #2: If you’re a cashflow investor …  new data shows that Gold and Bitcoin (with $0 cashflow) have at least doubled the return of the S&Ps since 2000.

• Surprise #3: If you thought everyone was invested in stocks … total assets in money market funds hit an all-time-high of $7.2T last week.

• The EU will ‘fast-track’ U.S. trade talks … after Trump extended his tariff deadline to Jul. 9

• The United Arab Emirates is acquiring ChatGPT Plus ($20) subscriptions … for its entire population.

• European EV sales show Tesla falling ~50% YoY in April…  its fourth straight month of declines. 

• Starting this week … all bags fly on Southwest Airlines for $35 (not-free).

• Japan’s Nippon Steel closed its partnership with U.S. Steel. 

• U.S. home prices posted their first monthly drop in two years.

• Standard Chartered issued a warning on the U.S. dollar… suggesting a major downturn in the near future.

• The Republican Tax plan would lift the tax on investment income… for college & university endowments from 1.4% to 21%.  This equals what U.S. corporations pay. 

• Nvidia beats estimates… with 69% YoY Q1 revenue growth, and it convinced Wall Street that it can outrun geopolitical road-blocks.

• Elon Musk's xAI will pay messaging app Telegram $300m … to integrate xAI's Grok chatbot for one year.

• There’s a tug-of-war going on… over the legality of some of Trump’s tariffs.

• YouTube accounted for the largest chunk (12.4%) of TV viewing.

• Our FED bought ~$70B of its own bonds in the last 2 weeks… but they’re not calling it Quantitative Easing.  As increased liquidity flows into the system – asset prices go higher.

• U.S. Q1 GDP revised to a downward -0.2%.

• Global liquidity / money supply is accelerating at an unprecedented rate … Bitcoin’s price is likely to follow, and I would expect the digital currency to do very well through the rest of 2025.  The global money printers are turning on, and digital money is going to be a big beneficiary.

• GameStop has officially added 4,710 Bitcoin ($500m) to its balance sheet.

• SharpLink Gaming raised $425m in funding to buy more Ethereum.

• Trump Media is raising $3B to buy more Bitcoin.

• Square is piloting real-time bitcoin payments… allowing us to spend crypto for T-shirts, hoodies, and hats at approved pop-up stores.  The rollout builds on Square’s ‘Bitcoin Conversations’ feature and is expected to be made available to all eligible merchants by EOY.  The initiative is part of a broader strategy to offer small businesses more payment options and position bitcoin as the Internet’s native currency.

• Want a Crypto 401(k)… the DOL (Department of Labor) is no longer standing in your way.

• It’s the largest U.S. Deed-Tokenization Project ever…  Balcony (a real-estate infrastructure firm) is using Avalanche’s AvaCloud platform to bring Bergen County, New Jersey’s over 370,000 property parcels worth +$290B onto the blockchain.  Instead of investing, Balcony is targeting critical infrastructure – digitizing deed records to: streamline operations, reduce fraud, and ensure transparency.  The immediate benefits will be: (a) Settlement times go from 90 days to 1 day, (b) Enhanced security, and (c) the Timely Recovery of lost revenue.

• Monday:  Global bonds rallied, with US Treasuries leading gains, on signs that Japanese authorities may adjust debt sales following a rout in the market. Japanese authorities signaled they are considering adjusting their debt plan after a selloff that drove the nation’s long-term borrowing costs to the highest levels in decades. Worries about the ability of governments to cover massive budget deficits weighed on developed-market debt in recent days, pushing long-dated US yields toward levels last seen in 2007. Long-dated debt led the move, with the 30-year US yield falling as much as nine basis points to 4.95% as the market reopened after a holiday. In Japan, similar yields fell more than 20 basis points. European bonds also rallied. So, the market got giddy over all that since it was Japans high rates causing issues with the carry trade.  Then add in that the European Union has agreed to fast-track trade talks with the US in a bid to avoid President Trump's 50% tariffs – which he announced would be delayed until July 9.

• “My 3 Weekly Ideas:

  - Global Rate Cuts… continue to add monetary tailwinds to global growth and global (non-U.S.) equities.  They also add to the elevated inflation potential, which limits the scope of any future, FED rate cuts.

  - U.S. Housing… remains a minefield given high interest rates for new buyers and elevated valuations.

  - Commodities… remain bullish on improving technicals, future outlook, and reasonably cheap valuations.

• My 5 Weekly Take-aways:

  - Retail traders are dumping Mag-7 … and their flood of money into the market has slowed to a trickle.

  - The Bitcoin 2025 Conference … produced a ton of announcements and buys, making it all about the follow-through.

  - Over 70% of Americans … would NOT use robotaxis or Tesla’s ‘full-self-driving’ technology.  That sentiment holds across age, party, income, and geography.

  - Southwest Airlines ended their … “Bags fly for Free” policy.

  - Trump’s pending legislation … threatens more than half of Tesla’s profits.  Tesla (in fact) seems to have the most to lose from the changing regulatory backdrop.

• Our FED’s PCE inflation indicator dropped… to its lowest level in 4 years, and markets completely ignored it.  Factually: over the past 3 weeks of trading, markets are unchanged. 

• Our administration fired a ‘Trouble in Tariff Paradise…  Warning Shot’ on Friday that could signal much bigger problems ahead.  It seems that:

  - A.) Negotiations with China have hit a snag over timing and rare earth minerals.

  - B.) China is willing to wait 3 to 4 weeks, let higher U.S. prices take hold, and then see how Trump’s TACO (Trump Always Chickens Out) negotiating strategy works out.

  - C.) Our goal of signing 90 tariff agreements in 90 days is way behind schedule.  We have signed ZERO agreements as of yet.

• Our markets are responding to tweet-driven chaos.  This ‘Chocolate-covered hand grenade’ technical pattern, could be our market’s behavior for the next 3 years.  This confusion IS the cause of every other global marketplace doing better than our own – for the first time in history.

• SPX Expected Move (EM):

  - Last Week’s (4-day) $126 EM … was spot-on as we moved ~$120 to the upside.

  - Next Week's (5-day) $104 EM could be dramatically wrong.  The Pros are describing this marketplace as like Riding in a Bumper Car without a Driver.

  TIP: Trade Light, Trade Tight, and ONLY Trade using defined-risk Spreads. 

• Just the Facts:

  - The S&Ps closed up +6.2% in May and +0.5% YTD.  This ranked the U.S. lower than the rest of the world on the YTD returns scale for the first time.

  - Sentiment rebounded in May, and remains historically high.

  - Big Tech is seeing small job growth and virtually zero M&A activity.

  - As life expectancy increases, people are Working-for-Longer.

  Overall, per Callum Thomas: This pattern has the Bull-Case being a late-90’s, late-cycle reset, and the Bear-Case being the bull-trap that occurred prior to the 2008 Great Financial Crisis.

• HODL’s: (Hold-On for Dear Life)

  - (+) PUBLIC.com Bond Portfolio (6.94% yield) / TLT (10-year T-Bills)

  -  (+) IBIT – Blackrock’s Spot Bitcoin ETF ($58.93 / in at $24)

  - (+) Physical Commodities = Gold @ $3313/oz. & Silver @ $33/oz.

  - Bitcoin (BTC = $104,900 / in at $4,310)

  - Ethereum (ETH = 2,550 / in at $310)

  - (+) GLD – Gold ETF ($303.5 / in at $212)

   

  Options for Income:  De-Risking a Portfolio… (using IBIT for example)

  - BUY-n-HOLD the IBIT ETF

  - BUY PUTs: 1 Std. Dev. Lower, Expiring = 3-weeks away, OTM (out-of-the-money) for protection.

  - SELL Covered CALLs: 0.75 to 1 Std. Dev. Higher, Expiring = 2-weeks away, OTM for income and to finance the PUTs.

   

  ‘De-Gen’ Economy:

  - SE:   ($160 / in at $107)

  - SSRM: ($11.89 / in at $10.90)

  - MPLX: ($51 / in at $50.4 w/ 8% Dividend Yield)

   

  Please be safe out there!

_{Expressed thoughts offered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. Culbertson, contributing sources and those he interviews.  You can subscribe by visiting: https://rfsfinanicalnews.beehiiv.com/subscribe.}

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