Financial markets swing on TACO and FAFO waves, stock market news of companies and geopolitics
Latest stock market news
• In the morning, the stock markets of Japan and China are falling by an average of 1%. Futures on US stock indices are also under slight pressure (-0.3%) - all after new tariff threats.
• Markets are riding the waves of TACO and FAFO.
TACO (Trump Always Chickens Out) is a term coined by a Financial Times columnist and used to describe Trump’s hesitation on tariffs following his April 2 “Liberation Day” speech. When asked about TACO at a recent press conference, the president responded sharply, calling the question “disgusting.”
FAFO (Fuck Around and Find Out) is an acronym that has been around since before Trump’s inauguration, but is increasingly being heard in conversations among traders. It is used to describe the financial market volatility and chaos that Trump’s decision-making has created.
• Oil is growing by 2% despite the OPEC+ decision to increase oil production. Russia resisted this step, but Saudi Arabia insisted on its own. American oil producers, who have higher production costs, are suffering from the decline in oil prices. But Trump needs cheap oil. The rise in prices could be caused by fires in Canada (risk of losing 500 thousand barrels per day) and the problem in Libya, as well as with Iran after the IAEA report.
Bitcoin is hovering around $105,000, taking out both bulls and bears in turn.
• Is this the dog that didn’t bark? That’s the question Sherlock Holmes fans would ask, given the complete lack of market reaction to US President Donald Trump’s threat to double steel and aluminium tariffs to 50%. The policy change, announced in a tweet, came after the markets closed on Friday evening, so some impact was expected today, perhaps a drop in the Canadian dollar given the size of US steel exports. However, the Canadian dollar actually strengthened against the generally weaker US dollar, while European stock futures were down slightly and Wall Street futures were only marginally lower.
• This could be the TACO meme in action, as investors suggest that "Trump is always a chicken," although he's putting it off until later because the new, higher tariff is set to go into effect Wednesday. Then again, last-minute shenanigans work well on reality TV.
European Union negotiators were unhappy with the latest twist and threatened retaliatory measures, while also making clear that the court's April 2 ruling against the tariffs had given them additional "leverage".
• Trump's latest rhetorical attack on China also appears to have backfired, with Beijing standing its ground. If Trump is counting on a call from Chinese President Xi Jinping to smooth things over, he may be waiting by the phone for a while. It was also somewhat ironic to hear Treasury Secretary Scott Bessent complaining about China holding up vital supplies from the United States, given that it was the United States that started the trade war with the express purpose of restricting Chinese imports.
• "Good news" is dwindling. Federal Reserve Chairman Christopher Waller, speaking in South Korea, said tariffs meant risks to activity and unemployment and risks to inflation. But he remained optimistic about the likelihood of "good news" of interest rate cuts this year, cementing his place as one of the Fed's most dovish officials.
• Artificial intelligence may exceed the energy consumption of Bitcoin mining by the end of 2025.
This is reported by The Verge with reference to Alex de Vries-Gao from the Vrije Institute for Environmental Research at the University of Amsterdam.
According to de Vries-Gao, by the end of 2025, data centers running on AI will consume up to 49% of the electricity of all data centers in the world.
• META shareholders voted against purchasing BTC on balance.
• Bloomberg analyst James Seyfarth said REX Shares has filed a prospectus in the U.S. for a SOL and ETH staking ETF with a potential launch in the coming weeks.
The funds are registered under the 1940 Act, structured as C corporations, and access the spot ETF launch through Cayman Islands subsidiaries, allowing them to bypass the traditional 19b-4 approval process.
• Last week ended with the first net outflow from spot BTC ETFs in a long time (-$144.8 million).
Spot ETH ETFs, unlike BTC, recorded a relatively significant weekly inflow (+$285.8 million) - Farside data.
• The US stock market ended May with its best performance in 20 years.
• JPMorgan's Jamie Dimon urges US to stockpile bullets and rare earth metals instead of Bitcoin.
• Tesla (TSLA) is the only company in its EV segment that has a positive cumulative free cash flow of $16.1 billion and continues to grow. All the others remain “in the red” — from -$0.7 billion (Workhorse) to a record -$22.4 billion (Rivian).
The worst dynamics among the major players: Rivian, Lucid, NIO and Ford's EV division — a deep FCF gap even after 10+ years of operation.
BYD is not on the list for comparison.
• EOG Resources (EOG) to acquire Encino Acquisition Partners for $5.6 billion, expanding Utica shale assets to 1.1 million acres and increasing production to 275,000 barrels per day. EBITDA growth expected to be 10% in 2025.
• Strathcona Resources (STHRF) has submitted a formal offer to acquire MEG Energy (MEGEF) for ~C$5.9 billion in cash and equity.
The strategy is to strengthen Strathcona's market position.
• NetApp (NTAP) forecasts $6.75 billion in 2026 revenue, betting on AI and flash storage.
• Palantir (PLTR) rose 4% after new government contracts. Commercial revenue rose 70% y/y.
• BofA's Hartnett sees several clear "bets against the dollar":
Crypto: Largest weekly inflow since January 2025 ($2.6B)
Gold: $1.8B inflow (annual pace is a record $75B)
EM debt markets: Largest inflow since January 2023 ($2.8B)
EM equities: Record weekly inflow in 2025 ($2B)
• OPEC+ agreed to increase supplies by 411 thousand barrels per day in July, - Bloomberg.
• Hims to cut 4% of staff amid ban on copycat weight loss drugs
• United (UAL) CEO says the budget airline model is dead and claims they are "cheating customers."
The airline also announced a partnership with JetBlue that will allow customers to exchange perks and miles between the airlines.
• Hyundai has built a $7.6 billion electric vehicle plant in Georgia to compete with Tesla and GM,
with plans to produce 500,000 vehicles a year.
• This week: In addition to Friday’s employment report, investors will also be watching reports on private sector payrolls and payrolls. Updated data on the U.S. trade deficit and consumer credit will be in focus, as will data from manufacturing and services, including the purchasing managers’ index (PMI), construction spending and factory orders.
In addition to Powell’s comments on Monday, Philadelphia Fed President Patrick Harker, Dallas Fed President Laurie Logan and Chicago Fed President Austin Goolsbee are also scheduled to speak this week.
• Fed Chairman Jerome Powell will speak later Monday, but will limit himself to opening remarks at a global financial conference.
Key events that could impact markets on Monday:
- UK house prices, European PMIs, US ISM factories survey
- Fed Chair Powell delivers opening remarks at the 75th anniversary conference of the Federal Reserve Board of Governors' International Finance Division, while Chicago Fed's Goolsbee and Dallas Fed's Logan participate in a question-and-answer session.
Current Fundamental Reviews
• Polish presidential election: Both candidates declared winners, result unclear.
Both the ruling coalition candidate, Warsaw Mayor Rafal Trzaskowski, and the opposition's Karol Nawrocki declared themselves winners of the second round.
According to the latest exit poll, Nawrocki is leading by a small margin - he has 51% of the vote, while his opponent has 49%. In the first exit polls, it was the other way around - Trzaskowski was leading, albeit by a slightly smaller margin.
The winner will replace Andrzej Duda.
• Hassett: Trump and Xi Jinping talk expected next week. China is in no hurry to resume deliveries of rare earth metals to the US and other products important to the US. Trump is angry about this and is looking for an opportunity to talk directly with Xi. Xi seems to think his position is strong and is in no hurry to talk to Trump.
• There are too many "office" soldiers in the Bundeswehr, the German Audit Office has found.
The funds that the German military receives from a special fund are too often spent on projects with dubious prospects, and many soldiers are engaged exclusively in administrative tasks, the Bild newspaper writes, citing a report by the German Audit Office.
• China has called French President Macron's statement in Singapore yesterday "double standards"
for trying to link Ukraine's defense to the need to protect Taiwan from a possible Chinese invasion.
• I received Hamas' response to the US proposal. It is absolutely unacceptable and only sets us back, - Donald Trump's special envoy Steve Witkoff on Hamas' refusal to accept his proposal for a ceasefire in Gaza.
• Britain to build six munitions factories and increase number of long-range missiles in Royal Air Force inventory - Starmer.
UK government discusses buying nuclear-capable F-35A fighter jets from US - The Times.
• Denmark has raised the retirement age to 70 years - the highest among the world's major economies.
In addition to Denmark, another 14 countries are now raising the retirement age, and a third of them - only for women.
• Trump administration cuts funding to several key HIV vaccine research programs - NYT
• Bulgaria is protesting against the introduction of the euro. The actions were organized by nationalist and pro-Russian parties and groups.
The protests took place in the Bulgarian capital Sofia and other major cities. Demonstrators in Sofia carried flags of the pro-Russian party "Vazrazhdane" and spoke under the slogan "The battle for the Bulgarian Lev is the last battle for Bulgaria."
• France. 692 fires, 200 injured, 2 dead and 559 detained.
Paris celebrated PSG's victory in the Champions League.
• New stage of trade wars: Trump decided to increase duties on steel and aluminum from 25% to 50%.
Customs duties on import of these alloys will increase from June 4, the US President said, speaking at the US Steel plant near Pittsburgh.
European Commission spokesman: EU ready to take appropriate measures in response to recent tariff hike by US
Commission concludes consultations.
Merz will travel to the United States next week for talks with Trump in Washington on June 5 - Bloomberg.
• Trump has decided to maintain the US role in NATO and appoint a new commander-in-chief of the Alliance – Reuters.
The US intends to deploy Tomahawk cruise missiles in Germany: the decision remains in force under Trump.
This was stated by the Inspector General of the Bundeswehr, General Carsten Breuer, in an interview with Der Spiegel magazine.
• The abolition of the veto right would lead to the end of the European Union and a “huge military conflict,” says Slovakian Prime Minister Robert Fico.
His country, along with Hungary, is constantly criticized in the EU for blocking joint initiatives.
• Trump called Musk 50% genius and 50% kid - WSJ. The newspaper found out that during his four months in the administration, Musk has developed a tense relationship with Trump and the White House. The president was skeptical of his initiatives as the curator of DOGE, including a promise to cut the budget by $1 trillion.
• NATO is not discussing Moscow's demand not to expand eastward. The issue was not raised at any of the recent or earlier meetings, informed NATO officials and diplomats told Radio Liberty. According to one of them, a written commitment not to expand is not something Russia "can easily obtain" since the right of states to freely determine which alliance to join is enshrined in a number of international treaties.
• The United States has begun serial production of new nuclear bombs - the National Nuclear Security Agency (NNSA).
Washington will begin serial production of the updated B61-13 gravity nuclear bomb with a capacity of up to 360 kilotons, which will be placed on strategic aviation aircraft, starting in July 2025, the agency said in a statement.
• Iran has increased its stockpiles of uranium enriched to near-nuclear-weapons levels, raising the alarm at the IAEA.
The International Atomic Energy Agency said that as of May 17, the country had accumulated 408.6 kg of uranium enriched to 60%. This is 133.8 kg more than the previous report in February, when it was 274.8 kg.
• China's factory activity contracted in May, but there are signs of improvement.
China's factory activity contracted in May, although the pace of decline was slower than in April, when the country struck a deal with the United States, an official survey showed on Saturday.
• The EU is to launch an online age verification app, the first step before the launch of an EU digital identity wallet in 2026 without sharing personal data with platforms, FT reports.
The app will help control access to sites with malicious content and put pressure on social media platforms that the EU says are not doing enough to protect minors.