Happy Thursday! As alarm bells ring over soaring deficits and yields, sentiment toward U.S. Treasuries has turned overly negative — but history suggests that might be exactly when opportunity strikes. Read on to see what past market cycles suggest and why this seasonal trend could set the stage for a summer surprise.

Also, U.S. private sector job growth hit its slowest pace in over two years, stirring fresh debate over the Federal Reserve’s next interest rate move amid political pressure. Dive in to see why this data sent ripples through the markets and what it could mean for your portfolio.

Plus, if you're interested in using AI signals to identify major market opportunities, check out today’s sponsor.

In Today's Edition

• MARKET RECAP

• FIVE ZINGERS

• MARKET HISTORY

• ONE FOR THE ROAD

Peak Pessimism On US Treasuries? History Says A Summer Rally May Be Near

As long-dated Treasury yields hover just below 5% and Moody's strips the U.S. of its final AAA credit rating, investor sentiment toward U.S. government bonds has reached some of its most bearish levels in decades.

Add in mounting fiscal deficits, rising interest costs, and political gridlock over debt reform only adds to the fear that the bond market may be headed into uncharted territory.

At the center of the debate is President Donald Trump's tax plan, dubbed as the “One, Big, Beautiful Bill,” which, according to new estimates, is expected to increase the deficit by $2.4 trillion over the next decade.

But here's the twist: just as pessimism hits a fever pitch, history whispers a different story. A quiet but consistent seasonal trend suggests that Treasuries — particularly long-dated bonds — tend to rally over the summer months. In fact, this pattern has played out with surprising regularity for over two decades — often delivering gains even when the broader outlook appeared bleak.

Could we be near a contrarian inflection point? Here’s what the data says.

Market conditions are shifting faster than traditional analysis can handle.

Between U.S.-China tariff negotiations, universal import duties and $3.8 trillion tax policy debates, volatility is the new normal. Most people are reacting to news that's already priced in.

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Yesterday: U.S. indexes ended Wednesday on a mixed note as weaker-than-expected economic data weighed on sentiment. The Nasdaq managed to close higher — supported by tech stocks — while the S&P 500 ended flat, and the Dow finished lower on the day to end its four-day winning streak. Private payrolls rose by just 37,000 in May, falling well below forecasts of 110,000, marking the slowest pace since March 2023. Meanwhile, ISM services slipped to 49.9, signaling contraction and marking the lowest reading since June 2024. Treasury yields declined in response, with the 10-year falling to around 4.36% and oil dropping as well. Despite today’s soft ADP report, a better-than-expected JOLTS reading for April showed continued strength in labor demand, suggesting any cooling in the job market may be gradual.

On Our Radar: Analysts will be paying attention to the U.S. employment report, unemployment rate and hourly wages — due Friday morning — for clues on the labor market and its implications for inflation and interest rates. On the earnings front, all eyes will be on Broadcom (AVGO) and Toro (TTC) as they are set to report after the bell today.

Dollar Dip: Shares of Dollar Tree plunged as much as 12%, before recovering a bit and closing down 8% on the day. Read on to see why the budget retailer’s earnings could decline by as much as 50% and what it means for the road ahead.

Tow & Behold: Thor Industries surged after posting stronger-than-expected earnings and reaffirmed its full-year guidance. However, it’s not all roses for the RV maker as European sales slid sharply amid growing economic uncertainty. Click here for the full analysis.

Asana Drama: Enterprise software provider Asana plunged more than 20% despite topping analyst estimates. Discover what made shares plunge and if the drop presents a good buying opportunity.

Musk’s Warning: Tesla CEO Elon Musk and Coinbase CEO Brian Armstrong warn that runaway U.S. debt could hand Bitcoin the crown as the world’s reserve currency. With federal spending hitting record highs, check out the full story to see why this fiscal recklessness might be the biggest financial shakeup yet.

Making Moves: Ark Invest made some significant moves on Wednesday, including dumping $5.2 million of Palantir stock. Read on to see why and what other companies Cathie Wood loaded up on, and which ones got trimmed.

The market’s gaining steam — and our ‘Easy Income Portfolio’ has been riding the wave with a 10%+ yield over the past month. Want the top three stocks fueling its success?

On This Day In 2024…

Nvidia’s market cap surpassed $3 trillion for the first time, joining Apple and Microsoft in the exclusive club. The milestone came as U.S. stock markets hit record highs, fueled by optimism around AI’s long-term economic impact. Nvidia’s dominance in AI chipmaking and its strong earnings growth helped propel the rally, with shares more than tripling that year. Apple became the world's first $3 trillion company in July 2023, before Microsoft overtook it in January 2024. Today, Nvidia is the largest company in the world with a market cap of $3.45 trillion.

QUOTE OF THE DAY

“The more certain something is, the less likely it is to be profitable.”

— Jim Rogers

US Private Sector Hiring Slows The Most In 2 Years: 'Powell Must Now Lower The Rate,' Trump Says

The latest data from the ADP National Employment Report revealed a significant slowdown in U.S. private sector job growth, with only 37,000 jobs added in May — the smallest increase in over two years and far below economists' expectations of 115,000.

While ADP's figures often differ from the official government data, the weak print only adds to the feeling of a broader labor market slowdown. It also intensifies the debate over the Federal Reserve's next move on interest rates, with continued pressure from President Trump to lower rates.

“ADP number out!!! ‘Too Late’ Powell must now lower the rate,” President Trump posted on social media after the data came out.

Wall Street reacted swiftly to the report, with the U.S. dollar and Treasury yields making moves. Read on for the full analysis and how this can impact your investments.

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