Dear valued client,
Markets closed out their second best week of the year as inflation in the U.S. dropped to 2.3% in April (compared to 2.4% in March and 2.8% in February), coming in below expectations and driven mostly by energy prices falling 3.7%. Walmart, on the other hand, expressed more caution in their earnings report this week announcing it will raise prices on some products due to increased supplier costs from tariffs, despite a temporary reduction on Chinese goods from 145% to 30%. The price hikes, expected to begin by late May and continue through the summer, will likely affect electronics and household goods rather than groceries, which account for 60% of Walmart’s revenue. The European Union is navigating complex challenges in supporting Ukraine while advancing its own defense autonomy. Starting June 6, 2025, the EU will impose higher tariffs on Ukrainian exports, particularly agricultural products, in response to pressure from farmers in member states like Poland, straining Ukraine’s wartime economy. Simultaneously, the EU is pushing for greater self-reliance in defense amid uncertainties over U.S. commitment and ongoing Russian aggression. The European Commission has proposed borrowing $167 billion against the EU budget to purchase European-made weapons, aiming to reduce reliance on American arms, while French President Emmanuel Macron has floated the idea of stationing French nuclear weapons in other EU countries, under strict conditions. These developments highlight the EU’s struggle to balance support for Ukraine, internal political pressures, and the long-term goal of a unified European defense strategy.
During President Donald Trump’s Middle East tour this week, Saudi Arabia pledged a $1 trillion investment in the U.S., including a $142 billion defense pact. Trump also announced the lifting of U.S. sanctions on Syria following the overthrow of Bashar al-Assad’s regime, a move celebrated in Damascus as a historic opportunity for rebuilding a nation devastated by a 14-year civil war that cost $800 billion in lost GDP. The sanctions relief, which still requires Congressional approval for some measures, aims to enable nations like Saudi Arabia, Qatar, and Turkey to fund Syria’s reconstruction, estimated to cost hundreds of billions. However, Syria’s new president, Ahmed al-Sharaa, faces significant challenges, including sectarian tensions, the integration of militias into a national security force, and managing competing influences from foreign powers like Saudi Arabia, Turkey, and Israel, which could complicate the country’s path to stability.
“Big thinkers are specialists in creating positive forward-looking, optimistic pictures in their own minds and in the minds of others. If you embrace possibility thinking, your dreams will go from molehill to mountain size, and because you believe in possibilities, you put yourself in position to achieve them.” – John C. Maxwell
Have a great weekend,
PW
