Friday Charts Tell the Real Market Story—And It’s Not What Wall Street Wants You to Believe

Markets don’t lie—but hedge fund managers do. Every candlestick, volume spike, and liquidation cascade paints a clearer picture than any analyst’s PowerPoint deck.

This week’s charts scream one thing: crypto’s playing by its own rules while traditional finance scrambles to keep up. No amount of Fed-speak or ’institutional adoption’ narratives can mask the raw momentum on-chain.

Meanwhile, your bank pays 0.01% interest and calls it ’wealth management.’

The Cleveland Fed’s Nowcast model sees US CPI rising 0.12% in May. That works out to just 1.44% annualized, so I think we can rule out “inflation worries” as the reason bond yields are up. 

Bonds may be decoupling from GDP:

Juliette Declercq highlights the unusual divergence between Treasury yields and the ISM’s survey of manufacturing activity — higher yields and lower GDP is, um, not what we want. 

The reverse Laffer Curve:

On the campaign trail, President TRUMP said that his proposed tax cuts would “be revenue-neutral when you add growth because we’re going to have magnificent growth.” 

But history shows that rising deficit spending is correlated to slower GDP growth. “Stimulus does not stimulate,” Research Affiliates concludes.

A listicle for the US economy:

The Atlanta Fed has Q2 growth tracking at 2.4%, but Torsten Slok lists 10 reasons why things are likely to get worse thereafter. 

Annoyingly, they are all self-imposed. Analysts at Deutsche Bank have an even longer list — they warn it will be “death by a thousand cuts” for the US economy.

Europe’s self-imposed tariffs:

President Trump threatened the EU with a 50% tariff on goods this morning, which is disappointing after things had seemed to have settled down. But the EU imposes similar tariffs on itself — Luis Garicano estimates that the internal barriers to trade (country-specific rules and regulations, mostly) between EU countries are equivalent to an internal tariff of 45% on goods and 110% on services. Ouch.

The EU stock market does not seem worried, however:

Bitcoin (in purple above) is up 17% over the past month, but it still hasn’t quite caught up with European equities — they’re up 21% on the year.

The vigilantes visit Japan:

The bond vigilantes have always been conspicuously absent in Japan despite the country’s world’s leading debt-to-GDP ratio of 250%. 

But they may finally have arrived. This week, yields on 30-year Japanese government bonds ROSE above 3% for the first time on record (which dates back to only 1999 when the 30-year tenor was first issued). 

Fun Japan fact: The four longest-operating companies in the world are all in Japan, led by the construction company Kongō Gumi, which was founded in the year 578! Not fun Japan fact: This morning’s inflation data showed the price of rice is up 98% year over year. 

Foreigners are a little worried about the US:

Torsten Slok shows that foreign participation in 30-year Treasury auctions is at a multi-year low. But the y-axis on his chart starts at 57.5% so I guess they’re not that worried.

For when markets are closed:

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Have a great weekend, storied readers.

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