🔍 The focus this week: Take a look in the rear-view mirror

🚨 Let us guess: you’ve been on high alert lately. No wonder: the last six months have featured trade wars, real wars in Ukraine and the Middle East, and a very public spat between the richest and most powerful people in the world, Elon Musk and the US president. That’s a lot for you (and your portfolio) to handle.

💵 At the same time, America’s erratic and unpredictable policies have shaken confidence in the US dollar, sending it down around 9% against a basket of currencies this year. Meanwhile, the price of oil has picked up 7% this year and 20% in the last month, mainly due to worries about tight supply – a consequence of conflict in the Middle East.

⭐️ So, seeking shelter from the volatility, central banks have stockpiled gold. Add in attention from other investors – institutional and retail alike – and the famed “safe haven” asset’s price has risen around 29% this year.

🇪🇺 You know what they say about “all that glitters”, though... When it comes to stocks, Europe has been one of the world’s top performers. Investors have been attracted to the region’s comparatively cheap valuations, lower interest rates, and a bigger-than-expected increase in government spending. This year, Spain’s main index has risen 20% and Germany’s 17%. (Factor in the dollar’s decline, and returns from foreign investments look even meatier.)

🇺🇸 Compare that to US stocks: they dropped nearly 20% from their February peak, before making a round trip back to their starting point. Investors pushed to “buy the dip”, see – and so far, they’ve been rewarded.

🔮 Looking forward, remember that these markets are unpredictable and volatile, especially over the short term. You could tilt the risk-reward scales in the right direction by diversifying your portfolio, balancing bets across assets and geographies. If you’re all-in on stocks, that’s fine – just be prepared for more volatility and, potentially, a bigger loss if markets don’t move how you’d like.

📅 On the calendar

• Monday: Eurozone PMI (June), UK PMI (June), US PMI (June).
• Tuesday: US consumer confidence (June). Earnings: FedEx.
• Wednesday: US new home sales (May). Earnings: Micron.
• Thursday: US durable goods (May), Japan Tokyo inflation (June), Japan unemployment (May), Japan retail sales (May), China industrial profit (May). Earnings: Nike.
• Friday: Eurozone economic sentiment (June).

👀 What you might’ve missed last week

🗺️ Global

• The US president left the G7 meeting early, returning to the White House Situation Room to monitor the situation in the Middle East.

• Investors have been concerned that America might deepen its involvement in the conflict, so they’ve helped send the oil price (WTI) another 4% higher this week. That brings this month’s rally to nearly 24% so far.

🇺🇸 The US

• The Federal Reserve (Fed) left interest rates where they were. That makes sense: the central bank also released new economic forecasts that show weakening economic growth, stubborn inflation, and rising unemployment. The decision to keep rates steady was unanimous, but the committee’s split on the outlook for later on. Ten officials expect at least two trims before the end of this year, while seven predict none. That’s because tariffs – and their impact on inflation – and a generally uncertain economic outlook could tempt the Fed to keep rates higher for longer.

• The US Senate passed the GENIUS Act. That’s a milestone for the crypto industry: the bill establishes the first federal framework for dollar-pegged stablecoins – and its approval supports the president’s aim to make the US the "crypto capital" of the world. Payment networks are bracing for impact, as industry giants like Amazon and Walmart are already reportedly moving toward stablecoin-style offerings. Coinbase and Robinhood’s share prices jumped on the news.

🇪🇺 Europe

• AI needs tons of power to run – more than traditional methods can churn out. Many companies, then, are turning toward natural gas: it’s seen as a “bridge fuel,” smoothing out the transition from old-school energy to greener alternatives. That’s why Mitsubishi Corp – one of Berkshire Hathaway’s investments – announced plans to buy US gas producer Aethon Energy for nearly $8 billion. (That would be one of its biggest acquisitions.) Plus, Abu Dhabi’s Adnoc just bid $19 billion for Santos, one of Australia’s top gas developers.