Dusted off an anecdote from 2013 for Father’s Day, about finding inspiration in the elements, strengthening our creative core (see below). Back next Sunday with full weekend notes. All the very best, E

Week-in-Review: Mon: EU parliamentary elections see center right coalition hold but also far right parties perform well / Macron calls for snap elections (6/30 and 7/7) as a result in an effort to stem Marine Le Pen’s NR party from gathering momentum, Israel’s Benny Gantz resigns from emergency government, Blinken visits Egypt to push for ceasefire, Mexico’s Sheinbaum says judicial reform to be among first things for congress to tackle, Apple’s developer conference unveils Siri’s integration with ChatGPT and other AI upgrades, Japan 1Q GDP (final) -1.8% (-2.0%e) / Deflator 3.4% (3.6%e), NY Fed 1y infl exp 3.17% (3.26%p), S&P +0.3%; Tue: Macron pushed back against rumors that he will resign if poor result in snap elections, ECB’s Lane can cut more as disinflation progresses / not worried about EUR moves affecting infl, US considering further restrictions on China’s access to chips, solid US 10y auction, Hunter Biden convicted of all 3 felony gun charges / president ruled out a pardon, Blinken says Netanyahu reaffirmed his commitment to a ceasefire, Japan machine tool orders 4.2% (-8.9%p), UK unemp 4.4% (4.3%e), Mexico IP 5.1% (4.2%e), Brazil IPCA infl 3.93% (3.88%e), US NFIB 90.5 (89.7e), S&P +0.3%; Wed: FOMC rates unch as exp / 2024 dots show 1 cut (vs 3 prev) / Powell slightly hawkish vs previous press conferences, US CPI 3.3% (3.4%e), Mexico CB notes ability to intervene given MXN’s recent volatility, rumors that Brazil FinMin Haddad may step down amid conflict with Lula, Japan PPI 2.4% (2.0%e), China PPI -1.4% (-1.5%e) / CPI 0.3% (0.4%e), Germany CPI 2.4% as exp, India CPI 4.75% (4.85%e) / IP 5.0% (4.5%e), S&P +0.9%; Thu: Taiwan CB unch as exp, Brazil’s Haddad reaffirms commitment to fiscal responsibility, Argentina’s Milei’s reform package approved by Senate, TSLA shareholders backed Musk’s $56b pay package, G7 agreed to provide Ukraine with $50b of aid from frozen Russian assets by year end, US/Japan sign 10y security pacts with Ukraine, data shows China surpassed US in global car sales for the first time in 2023, Australia Emp change 39.7k (30.0k e) / Unemp rate 4.0% as exp, EU IP -3% (-2%e), US Init claims 242k (225k e), US PPI 2.2% (2.5%e) / Core 2.3% (2.5%e), S&P +0.2%; Fri: BOJ unch as exp / will reduce bond holdings at next meeting (a reduction this meeting was expected) – slightly dovish vs expectations but Ueda says cuts will be substantial, S. Africa’s Ramaphosa to be reelected President as ANC and DA form coalition of national unity gov’t, Indonesia’s Prabowo plans to increase debt to GDP ratio to 50% over next 5y (currently 39%), French left-wing coalition publishes manifesto to undo many of Macron’s reforms, German gov’t working to prevent EU tariffs on Chinese EVs coming into force, Putin calls for Ukrainian troops to withdraw from eastern regions in return for ceasefire, Argentina CPI 276.40% (278.8%e), India Wholesale prices 2.61% (2.70%e), EU trade bal 19.4b (17.5b exp), Brazil eco activity 4.01% (3.90%e), US impt prices 1.1% (1.3%e), US UofM sentiment 65.6 (72e) / 1y infl exp 3.3% (3.2%e) / 5-10y infl exp 3.1% (3%e), China M2 7% (7.1%e), S&P flat.

Weekly Close: S&P 500 +1.6% and VIX +0.44 at +12.66. Nikkei +0.3%, Shanghai -0.6%, Euro Stoxx -2.4%, Bovespa -0.9%, MSCI World +0.7%, and MSCI Emerging +0.2%. USD rose +9.5% vs Ethereum, +6.8% vs Bitcoin, +1.6% vs Chile, +1.3% vs Turkey, +1.3% vs Indonesia, +0.9% vs Euro, +0.6% vs Brazil, +0.4% vs Yen, +0.4% vs Mexico, +0.3% vs Sterling, +0.2% vs India, and +0.1% vs China. USD fell -2.7% vs South Africa, -0.7% vs Russia, -0.5% vs Australia, -0.3% vs Sweden, and -0.2% vs Canada. Gold +1.0%, Silver +0.1%, Oil +3.9%, Copper -0.2%, Iron Ore -5.2%, Corn +0.6%. 10yr Inflation Breakevens (EU -5bps at 2.02%, US -12bps at 2.18%, JP +6bps at 1.53%, and UK -6bps at 3.65%). 2yr Notes -18bps at 4.71% and 10yr Notes -21bps at 4.22%.

2024 Year-to-Date Close: Argentina +52.4% priced in US dollars (+70.2% priced in pesos), Venezuela +28.5% priced in US dollars (+30.7% priced in bolivars), Turkey +26.5% in dollars (+40.2% in lira), Denmark +21.6% in dollars (+25.8% in krone), Taiwan +18.6% (+25.5%), NASDAQ +17.8% in US dollars, S&P 500 +13.9% in US dollars, Netherlands +12.9% (+16.8%), MSCI World +10.6% in US dollars, Colombia +8% (+15.3%), India +7.6% (+8%), Malaysia +7.5% (+10.5%), Hungary +6.6% (+14.7%), Spain +5.2% (+8.8%), HK +5.2% (+5.2%), Greece +5.2% (+8.8%), UK +4.7% (+5.3%), Italy +4.1% (+7.6%), Germany +3.9% (+7.5%), Japan +3.8% (+16%), Ireland +3.6% (+7.1%), Russia +3.6% (+3.8%), Czech Republic +3.6% (+7.3%), Euro Stoxx 50 +3.5% (+7%), Norway +3% (+8.8%), Poland +2.6% (+6.9%), Sweden +1.9% (+6.9%), Switzerland +1.9% (+8.1%), Israel +0.8% (+4.2%), Belgium 0% (+3.4%), China -0.2% (+1.9%), Austria -0.5% (+2.9%), Canada -0.7% (+3.2%), South Africa -0.7% (+0%), Chile -0.7% (+5.2%), Singapore -0.8% (+1.8%), Russell -1% in US dollars, Australia -1.5% (+1.8%), New Zealand -2.4% (+0.8%), Korea -3.4% (+3.9%), France -3.8% (-0.5%), Saudi Arabia -4% (-3.9%), Finland -4.3% (-1.1%), Philippines -6.7% (-1%), UAE -6.7% (-6.7%), Portugal -7.1% (-3.9%), Indonesia -13.3% (-7.4%), Thailand -14% (-7.7%), Mexico -16.4% (-9%), Brazil -19.4% (-10.8%).

Anecdote (Dec 2013): Whitewash raced up the sand. Crashed against our shins. With each wave, the ebb, the flow, we sank deeper. Wiggling our toes. Burrowing. Squinting as we watched our oldest sons battle thundering 6ft Santa Barbara surf. “Don’t see Europe pulling out of this,” said my buddy. I’d asked what trends he saw unfolding. He leads a vast global corporation. And as sales roll in from every nation, he watches tides rise, fall, gentle ripples, waves, tsunamis. “Three things drive the success of nations and companies – effort, innovation, attitude,” he continued. “America has all three.” Asia has effort, attitude, and while they lack innovation, they’re good at stealing ours. “Southern European sales remain depressed – they make too little effort, have no attitude, and not enough innovation.” As our boys battled Mother Nature, pounded, pummeled, we discussed how to help them ride the coming wave. You see, they’ll have to compete in a world dominated by artificial intelligence. But thankfully, robots aren’t creative. Yet. And can’t surf, or savor sunsets, swirling sparks, dancing with the stars, high above beach bonfires. Which is why we train our boys to struggle, strain, find inspiration in the elements, strengthening their creative core. “This kid interrupted me nervously, asked for 5 minutes,” said my buddy. “Showed me his playlist, with songs from our past, present, our future – weaving them seamlessly into a tale about our brand, in such a cool, ingenious way, that I grabbed him,” he said, excitedly. “And invented a new role, a new title – gave it to him, on the spot.” Our sons returned. Their eyes sparkling; sea, sun, sand, salt. Youth. “You see us Dad?” asked Jackson and his pal, in unison, lips blue, utterly exhausted. Taller. Bigger. “Caught three waves in three hours, not bad, didn’t die,” they said, winking, ecstatic, inspired.

Good luck out there,

Eric Peters

Chief Investment Officer

One River Asset Management

Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.