Edward Meir's week in review and thoughts on the week of June 29, 2026

What surprised us last week was just how poorly crude oil prices reacted to what should have been bullish news coming out of the Middle East. Prices opened lower Friday morning despite reports from the night before of a Singaporean container vessel being attacked by an Iranian drone in the Persian Gulf. No one was hurt in the incident, and the ship resumed its journey. But Iran acknowledged the hit and warned vessels not to hug the Omani coast when crossing, but instead to sail closer to the Iran’s coast after coordinating with the IRGC. The attack had its desired effect; Reuters reported 13 tankers transited Friday, versus 24 Thursday (the day of the attack), and 27 Wednesday.

Things have taken a turn for the worst since then, as yet another tanker was hit over the weekend. In response to the Iranian attacks, the US military said late Friday it hit several Iranian targets, including missile and drone sites and radar installations. Iran was quick to respond, conducting missile and drone strikes targeting eight US military installations in Kuwait and the US Navy’s Fifth Fleet in Bahrain. The US responded to these attacks yet again late Saturday. If things descend into tit-for-tat reprisals going into this week, the Memorandum of Understanding signed between the two countries could turn out to be a dead document.

Separately, Israel and Lebanon have agreed to a US-brokered cease fire, allowing the Lebanese army to move into areas controlled by Israeli forces in southern Lebanon. However, Hezbollah rejected the deal outright, and there already has been a drone attack by Israeli forces since the agreement was reached. The situation is far from settled and may be another factor that could scuttle the MOU.

Metals

We saw lower moves in base metals. Aluminum prices retreated by about 6.3% last week, shadowing crude lower on rising perceptions of easing metal outflows. Nickel and tin were the second worst performers on the week, off by about 5% each, followed by zinc and lead, each down by about 2.5%. Copper ended the week down by 1.75% on account of a stronger dollar and heightened volatility in chip stocks, many of which directly impact AI commodity trades like copper, silver and tin. Nickel retreated on renewed speculation that Indonesian government authorities are not going to be as stringent about export quotas going forward. US steel prices edged higher, but Chinese valuations struggled this past week, as did a host of inputs local steel mills typically buy, including iron ore, coking coal and coke.

Stocks

In the US equity space, shares of Micron posted a resounding earnings beat as the company also raised forward guidance on what seems to be insatiable chip demand. However, by week’s end, the stock — as well as the general chip sector — rolled back a good portion of earlier gains on profit-taking and concern about an over-extended run in many of these names. A 30% decline in SpaceX shares from the company’s post-IPO peak and ongoing weakness in its bonds did not help the tone in US equities either. For the week, NASDAQ declined by about 4.6%, while the S&P 500 ended off by 2%. A rotation into safer names enabled the Dow to end the week with a 0.6% advance.

Encouraged by the sharp drop in energy prices, 10-year treasury yields declined by about 10 basis points on the week to settle Friday at 4.37%.

The general dollar index ended the week slightly lower, but its weakness hardly helped precious metals. Gold ended $150/ounce (3.5%) lower on the week at $4,096/ounce and has closed down for four weeks in a row. Silver fell much harder, off by roughly $7/ounce on the week (down some nearly 11%) and is trading at a seven-month low. There were roughly 5% declines in both platinum and palladium as well.

Trade

President Trump threatened to slap a 100% tariff on imports from European countries if they did not cancel a planned digital services tax on American companies. He added he would disregard any prior agreements with the EU “whether implemented, signed, or not”. The European parliament recently backed an EU-wide digital tax, but the measure still requires the unanimous support of all 27 member states. At this stage, it is unlikely all 27 will approve, so we may not see the tax materializing. Nevertheless, the Europeans warned they would retaliate against any new US tariffs if Washington proceeded with the threat.

Out of Europe, the Financial Times reported the EU is set to impose a 15% export fee on overseas sales of aluminum scrap exported to the US and Asia starting on Sept. 9. The measure needs to be approved by a majority of member states. So, unlike the digital tax, it will likely go through. European aluminum producers pushed for the duty, arguing that rising scrap outflows are eating into domestic feedstocks. However, most domestic recyclers, along with the Bureau of International Recycling, have rejected the concern about shortages, countering that duties would hurt scrap collection, reduce liquidity in many grades, and undermine the regional economy. (For its part, the US imposes 50% tariffs on finished aluminum imports, waives duties on aluminum scrap and has no export duties either. But there is a push here, too, to do the same.)

Macro readings and other news from the past week

• The PCE inflation price index for May rose by 0.4%, in line with the consensus and was unchanged from the prior month. Core PCE rose by 0.3%, in line with estimates as well. On an annual basis, the PCE was up by 4.1% through May, the first reading above 4.0% since April 2023. Excluding food and energy, the index was up 3.4% year-over-year, slightly above the 3.3% seen in April.
• A side note on inflation: We should start to see a significant reversal in readings for June once the numbers come out in a few weeks’ time. Energy will be the main downside driver here given that oil prices are trading below where they were when the Gulf War began. In fact, Bloomberg highlighted the glut of oil on the market as increased sailings out of the Gulf, higher production, and softer Chinese demand are all contributing to much more comfortable supply. As an example, Angolan crude — a grade typically snapped up by China — is selling at the biggest discount in more than a decade, at nearly $10 a barrel below the Dated Brent benchmark, itself at a two-year low. Bloomberg adds even Chinese refineries are offering both crude and product for sale.
• US personal income readings for May increased by 0.7% (consensus 0.3%) after an unchanged reading in April, while the more important personal spending category rose by 0.7% m/m, coming in ahead of the 0.3% expected.
• The third estimate of Q1 GDP was revised higher to 2.1% from 1.6% in the second estimate. The upward revision was due to a downward revision in imports (better for growth), although consumer spending was revised lower as well. However, corporate profits were revised higher by some $34.0 billion.
• Durable goods orders decreased by 4.5% m/m in May, better than the 3.2% decline expected. Excluding the volatile transportation category, orders were up by 1.3%, ahead of the 0.5% expected as well.
• Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, increased 1.6% last month after an upwardly revised 0.7% decline in April. Orders for computers, electronic products, appliances, and components all rose by 0.3% m/m. There were solid increases in orders for fabricated metal products, primary metals, and machinery, too.
• Weekly initial jobless claims decreased by 12,000 to 215,000 in the latest week. Continuing claims rose by 21,000 to 1.821 million from a previous level of 1.8 million, but both readings show a labor market that remains in decent shape.
• US new home sales fell 7.3% in May to a 580,000-unit annual rate, while the number of new houses for sale rose to 496,000. Months’ supply increased to 10.3 months from 9.3 in April. The median sales price was $424,900, virtually unchanged from a year earlier. Notably, the Western region, which features the highest-priced homes, saw the biggest hit to sales month-over-month, but there was also weakness in the South — the nation’s largest homebuilding market.
• US consumer sentiment improved in June mainly on moderating gas prices, but it still remains 13% below where it stood prior to the war and is almost 20% below year-ago levels. The University of Michigan’s final reading rose to 49.5 from 44.8 in May, but the expectations index shot up 15% for the month. Inflation expectations eased from the month prior, with year-ahead projections at 4.6% and long-run expectations at 3.3%. More than half of US consumers cited high prices as a strain on their finances, but they still seem to be spending nevertheless.
• China’s industrial profits continued to grow, but the data again pointed to an uneven recovery. Profits at major industrial firms rose 18.8% year on year in January-May to 3.14 trillion yuan, accelerating from 18.2% in January-April. Firms in AI-related electronics, new-energy materials and upstream sectors did very well, but auto and furniture activity were weak.
• Speaking at the Global Steel Dynamics Forum in New York, CEO Naveen Jindal of Jindal Steel & Power said trade measures adopted by the US have ensured the steel sector is “thriving” instead of just “surviving.” Lourenco Goncalves, CEO of Cleveland Cliffs, echoed similar sentiments, praising the “consequential effort by [the Trump administration] to reindustrialize America” and adding that “whether a Democrat or Republican wins the next elections, the steel tariffs will stay.”
• Nucor and Steel Dynamics both released their respective Q2 guidance last week. Nucor said earnings are “expected to increase across all three of its operating segments” as compared to the first quarter of 2026 due to elevated steel prices and stable volumes. For its part, SDI said Q2 profits are expected to be “meaningfully higher” than in Q1. “Demand across key end markets remains solid, with non-residential construction, energy, automotive and industrial sectors leading performance,” SDI said. It also noted its order backlog is nearly 40% higher than a year ago.
• JP Morgan remains bullish on copper and sees prices pushing towards $15,000/ton over the coming quarters. The bank cites tight mine supply and strong demand as key upside catalysts. It sees the Trump administration pursuing phased tariffs on cathodes following the upcoming recommendation from the Commerce Department due later this month.
• Germany’s industry association BDI lowered its growth outlook for 2026. It sees the country growing by only 0.4% this year, down from a 1% forecast made in January. BDI’s president said the situation in German industry was “critical, but not hopeless,” arguing the government must act more decisively to restore competitiveness. High energy and labor costs, elevated taxes and excessive bureaucracy are all burdening the economy, he noted. Separately, German business morale rose in June, with companies more positive about their current situation than they have been in nearly two years. The Ifo institute’s business climate index increased to 85.6, up slightly from 85.0 in May
• There were a number of flash PMI readings that came out last week from S&P Global showing global manufacturing in good shape. In Japan, the June manufacturing index came in at 54.9, down from 54.5 in May, but still in solid expansion mode. In Europe, the manufacturing reading dipped to 51.3 from 51.6, but service activity edged up to 48.9 from 47.7. The US beat all the others, with its manufacturing reading shooting up to 55.7 in June, a 49-month high.
• Reuters quotes Indonesia’s mining ministry as saying the country has not yet decided on its nickel production quota for the balance of 2026. This could explain the recent weakness we have been seeing in nickel as, presumably, their growing perceptions that production restraint will not be pursued as vigorously going forward.

This week’s US macro readings

• Tuesday, we get the S&P Case Shiller Home Price Index for April, followed by the Chicago business PMI for June (expected at 55, last 62.7.) We get another consumer confidence report for June (expected at 94.6, last 93.1) followed by May job openings (expected at 7.3 million, last 7.6 million).
• Wednesday, we get the June ADP employment report (expected at 110,000, last 122,000), followed by June ISM manufacturing (expected at 53.8, last 54). May construction spending also comes out (expected at .2%, last .4%), while after the close, we get June auto sales. (Fed Chairman Kevin Warsh also gives a speech Wednesday.)
• Thursday brings us weekly jobless claims (expected at 221,000, last 215,000), May factory orders (expected at 1.1%, last 4.8%), and the critical June nonfarm payroll report (expected at 118,000 last 172,000). The June unemployment rate is expected to come in unchanged at 4.3% while hourly wage growth is seen rising to 3.5% from last month’s 3.4% but still trailing overall inflation growth.

We wish all our readers all the best for the upcoming week.