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A Proper Spring – finally

Barry Sadovsky

May 25, 2026

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Contrary to last week, most international benchmarks are holding in the green as the week begins, led by the Shenzhen Composite’s 2.3% increase and an optimistic 1.15% rise in the Dax. Even US markers are expected to show a weekly increase nearing 1%. Optimism abounds as Trump continues delaying the day of reckoning with Iran in favor of Gulf-state pressured diplomacy. Earnings season winds down with a remarkable 27.49% increase in earnings per share across the board – and Spring is an established fact. If only inflation were lower, oil cheaper, and geo-politics a discernible science.

US Markets

Despite a surprisingly good earnings season, US indices are still struggling to break through resistance, with large traders increasingly in bear territory and bond yields at an 18-month high on inflationary risk and Gulf war concerns. Seeking Alpha’s Daniel Jones quotes the margin at 3.12% S&P earnings versus 4.57% on the 10-year treasury – a spread that bodes a possible rate hike by incoming Fed Chair Kevin Warsh.

Formerly Ben Bernanke’s most vocal critic, President Trump’s hopes for Warsh lowering bank rates may be misplaced, considering persistent 3.8% inflation and perhaps even a looming recession. What is almost certain is the expected reversing of post-2008 quantitative easing, which has resulted in $8 trillion worth of assets owned by the Federal Reserve. Also pressuring the economy is a further increase in mortgage rates to 6.5%, quelling hopes for a housing market rebound, where growth decreased from 1.7% in March to 1.4% in April.

European Markets

European business activity and Composite PMIs fell at a 30-month record pace based on last week’s figures, and inflation in the continent’s four major economies either held high or increased in May. France delivered weak PMIs due primarily to slowing services and manufacturing. Political uncertainty in the UK produced a 5-point drop in its PMI – though manufacturing improved slightly, and the FTSE ended a 4-week drop as pundits began pricing in expectations of a Bank of England rate hike in July.

This is undeterred by a 4-year record drop in retail sales and another rise in unemployment. Against all this, the pan-European Euronext – provider of Dutch, French and Belgian (among others) market indicators – reported Wednesday that their trading rates and revenues jumped by 30% YoY.

Asian Markets

Good news from Asia: Japan last week reported a better-than-expected 2.1% increase in GDP and stable trade balance figures, based on a higher-than-expected 14.8% YoY exports increase – especially to the EU and China. Inflation slowed to 1.4% YoY, a 4-year record, maintained in part on government fuel subsidies.

China reported a mere 4.1% increase in industrial output and a paltry 1.7% increase in retail sales – a 6-year low. Monday early morning will see Japan releasing its Global Manufacturing PMI, followed by RatingDog’s data for China.

Commodities

As oil prices continue consolidating around the $100 mark, prop traders should be alert for the API’s inventories report Wednesday evening and the EIA’s report the following day – both expected to show a decrease in inventories, which could provide a bullish catalyst for oil prices.

Equities Watch

After last week’s disappointing performance by Walmart – thanks to its conservative sales and profit target expectations – prop traders should keep an eye on Costco’s quarterly report on Wednesday, as high oil prices slash consumer spending in the retail sector.

Meanwhile, SpaceX filed on Wednesday its registration for what is expected to be the largest IPO in history. The company expects to raise up to $70bn as of June, when shares will appear under the ticker symbol SPCX. And the world’s most valuable company – NVIDIA, at a market capitalization of $5.23 trillion – is still seeking approval for sales into the world’s largest market, China, following the failed Trump-Xi meeting earlier this month.