Week ahead: The green streak meets Fed speak

Nine straight green candles have the tape talking déjà-vu circa early-2000s momentum, but don’t be fooled—the S&P is still licking a gnarly drawdown from February highs, a stark reminder that April’s tariff tremor wasn’t just a speed-bump but a full-blown pothole. This week’s FOMC is the next gauntlet: markets haven’t completely abandoned a June cut, but that odds curve flattened hard after a surprisingly robust 177k payrolls print. Washington’s drumbeat for instant relief grows louder. Yet, the Fed must juggle stubborn headline inflation against an economy freshly out of positive territory—GDP’s first quarterly contraction since 2022, courtesy of a tariff-front-loaded import binge. My base case? Rates on ice, the statement liberally salted with “data-dependence” to keep the easing door cracked open while making it clear the Fed isn’t playing pawn to political pressure. Expect a small dollar pop and a minor risk wobble on any hawkish undertones. Still, a whiff of dovish recalibration will unleash another systemic bid cycle as quants scramble to chase the grind higher.

Earnings season is cushioning the macro angst—two-thirds through, bottom-line beats are running 7% ahead of whispers, more than double the norm, and cloud-fuelled mega-caps just flexed hyper-growth AI budgets on the street. If the next tier—ride-share, media, energy—can deliver “good-enough,” it reinforces that this tariff saga is a supply-chain kink, not an earnings apocalypse. That narrative keeps equity bulls confident, even as the data oven heats up.

All eyes shift to China on Friday. Customs data should show double-digit dives in exports and imports after April’s U.S. tariff sledgehammer—roughly 14–15% of outbound flows slammed into a wall. PMI chills already hinted at softer demand, and any rerouting to ASEAN or LatAm will be a trickle, not a deluge. Two days prior, the FX-reserve print doubles as a stealth Treasury-sale litmus test—any whiff of liquidation will set dollar-funding chatter ablaze.

Mid-week Taiwan’s trade snapshot will be the canary: U.S. shipments should decelerate sharply after two blowout months, exposing how top-heavy chip-centric exports really are. If both prints confirm the tariff sting, Asia’s export engine shifts from sputter to stall, and FX vols will spike well before the economists update their models. Watch CNH for first blush, TWD for bleed-over, and clear your calendar—Beijing’s reserve call could send ripples through the Treasury complex.