Morning Roundup

By Mark Masterson on June 5, 2025

Good morning,

Below are the news items moving markets today:

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Executive Summary:

Quick Roundup this morning due to meetings. 
Note: I won’t be sending out a Roundup for next week as I will be traveling.  The Roundup will be back the following week.  (Unless something dramatic happens – of course)

The war of words is escalating on social media as Elon Musk continues to push back against the Big Beautiful Bill….

Yesterday, Elon Musk posted several critical comments on X…..

• Elon has called the Big, Beautiful Bill “debt slavery for the American people.”
• ELON MUSK: “In November next year, we fire all politicians who betrayed the American people.”
• Elon Musk has endorsed a hypothetical constitutional amendment that would make members of Congress ineligible for re-election if the federal deficit exceeds 3% of GDP.

Elon also posted:

Call your Senator,

Call your Congressman,

Bankrupting America is NOT ok!

KILL the BILL

At the same time, President Trump is now suggesting we completely remove the debt limit….

• TRUMP SAYS THE DEBT LIMIT SHOULD BE COMPLETELY REMOVED

Trump continued with a post on Truth Social…..

I am very pleased to announce that, after all of these years, I agree with Senator Elizabeth Warren on SOMETHING. The Debt Limit should be entirely scrapped to prevent an Economic catastrophe. It is too devastating to be put in the hands of political people that may want to use it despite the horrendous effect it could have on our Country and, indirectly, even the World. As to Senator Warren’s second statement on the $4 Trillion Dollars, I like that also, but it would have to be done over a period of time, as short as possible. Let’s get together, Republican and Democrat, and DO THIS!

Donald J. Trump Truth Social 06.04.25 01:25 PM EST

Unfortunately, old posts just don’t go away.

Many have found this old post from President Trump dating back to 2012 that shares a very different view of government spending….

Trump 7 31 12

Some articles on the BBB negotiations….

• Elon Musk urges Republicans to kill tax cut legislation (Politico, Axios); Trump irked by Musk’s criticism of tax legislation (Politico, link)
• House Republicans are trying to appease Elon Musk, upset over their support for Trump’s domestic policy bill (NY Times)
• Senate parliamentarian could strike out S.899 ‘revenge tax’ provision, citing violation of reconciliation rules (Politico)
• Senate Republicans and White House at odds over potential changes to tax-cut provisions in reconciliation bill (Punchbowl News)
• Senate GOP planning to include public land sales in their legislation to help fund tax cuts (Bloomberg)
• Trump, GOP senators discussed reducing the $40K SALT deduction cap, with differing views from House lawmakers (Bloomberg)
• Trump’s administration is renegotiating Biden’s semiconductor grants, with some potentially being cut for taxpayer benefit (Reuters)

Meanwhile, it looks like the Fed sees growth slowing in the latest Beige Book report:

• Fed’s latest Beige Book reported economic activity has declined slightly since the previous report.
• Half of the Districts reported slight to moderate declines in activity, three Districts reported no change, and three Districts reported slight growth.
• All Districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions.
• Manufacturing activity declined slightly.
• Consumer spending reports were mixed, with most Districts reporting slight declines or no change.
• Outlook remains slightly pessimistic and uncertain.

Interesting stat from the Fed:

• 79% of Americans have said they changed their behavior in response to higher prices, per the Fed.

Here is the latest on trade and tariffs….

• Trade/Tariffs:
  • China’s control of rare earth minerals puts US in vulnerable position amid trade tensions (Axios)
  • US auto suppliers urge immediate action on China’s restricted rare earth exports, fearing disruptions in auto parts production (Reuters)
  • EU urges China to end rare earths export restrictions amid ‘alarming situation’ facing Europe’s auto industry (SCMP, FT)
  • Higher tariffs on steel and aluminum will increase material costs for home builders, car manufacturers and can makers (NY Times)
  • Aluminum industry executives warn manufacturers may not be able to absorb latest tariff hike, threatening demand destruction (Bloomberg)
  • Ahead of next round of trade talks Japan reiterates demand for US to remove tariffs (Bloomberg)

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Articles of Interest:

• Washington:
  • Trump signs proclamation banning travel from 12 countries following attack in Boulder, Colorado (Bloomberg, link)
  • Trump administration suspends entry for foreign students at Harvard for six months, citing national security concerns (Axios, Reuters)
  • Biden responds to Trump’s investigation announcement, denying allegations of cognitive decline cover-up (Axios, FT )
• Central banks:
  • Fed’s latest Beige Book reports decline in economic activity (Bloomberg)
  • Minneapolis Fed President Kashkari waiting on outcome of trade negotiations before deciding on rates (Bloomberg)
  • Fed Governor Bowman confirmed by Senate as Vice Chair for Supervision (Reuters)
• Markets:
  • Global funds rethink exposure to US markets amid fallout from tariffs and escalating debt (FT)
  • Japan 30Y auction met with weakest demand in almost two years (Bloomberg)
  • Latest JGB auction reflects continuing run of poorly received bond sales globally (Bloomberg)
  • US small-cap stocks entering a favorable season, historically outperforming larger stocks in June (Bloomberg )
• Economy:
  • US reducing consumer price data collection, raising concerns about inflation data reliability among economists (NY Times)
  • US business optimism sharply declines, with only 27% of executives confident about economic outlook (Bloomberg)
  • US businesses cautiously optimistic about domestic tourism this summer, despite signs of reduced consumer spending (NY Times )
• Geopolitics:
  • Trump praised Ukraine’s drone attack as “strong” but fears it complicates his ceasefire efforts with Russia (Axios)
  • Trump administration reallocating Ukraine’s antidrone technology to US forces in the Middle East for urgent protection (link )
  • Putin warned Trump of response to Ukrainian drone attacks while calling peace talks “useful” (Reuters, Semafor)
  • Trump’s attempts to negotiate with Putin, Xi, Iran not working, revealing challenges in securing deals with strong leaders (Bloomberg)
  • Israel PM Netanyahu’s government faces possibly of collapse following revolt by ultra-Orthodox coalition partners (Bloomberg, FT )
  • Chinese hackers broke into US telecom company in summer of 2023, earlier than publicly known (Bloomberg)

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Charts of the day:

A few interesting gold charts…..

Bloomberg reporting that central banks have been buying nearly four times more gold than what has been publicly disclosed

Bloomberg 6 5 25

Yes, the market is still expensive historically based on the “Buffett Indicator”

Warren Buffett Indicator jumps to 198%, the 2nd most expensive valuation of all-time

Barchart.com 6 5 25

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Quote of the day:

“The purpose of knowledge is action, not knowledge.”   

― Aristotle