💰 5 Fact Friday: Bonds Spiral & Bitcoin Soars

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ECONOMY
1. Yields Hit 5% After U.S. Downgrade 👀

When Moody’s downgraded the U.S. credit rating from Aaa to Aa1 last Friday, most headlines brushed it off. Stocks barely flinched. Analysts called it old news. After all, Fitch and S&P already made similar moves years ago.

But here’s the thing: it’s not always about the level—it’s about the direction.

A downgrade is a step down in trust. It reflects what many already suspect: the U.S. is starting to look more like a risky borrower. Why? Because we are.

The House just passed a “big, beautiful bill” that could push our projected debt-to-GDP ratio from 117% in 2034 to 128%. That trajectory would drive the annual interest expense to $2.2T—nearly 29% of all federal revenue.

(Sidebar: Although the media focuses on total debt, debt-to-GDP is a far more useful metric here. Think of it like personal finances: $20K in debt might be manageable with a $200K income, but crushing if you make $50K.)

Then, as if to mock the market’s non-reaction, this week’s 20-year Treasury auction flopped.

Investors didn’t buy until yields reached 5.05%, well above the 4.61% average from the past six auctions. That weak demand pushed yields higher and stocks lower. The 10-year rose to 4.59%, and the 30-year hit 5.1%—the highest level since 2007.

To be fair, the 20-year Treasury is less liquid than the 10- and 30-year. But in the shadow of a downgrade, soft demand sends a clear message: big buyers are starting to question America’s fiscal trajectory.

Here’s why that matters:

• Higher yields → more expensive borrowing for the government

• More debt + higher rates → ballooning interest payments (now the second-biggest federal expense)

• Fewer buyers → risk of a debt spiral, or at the very least, persistent upward pressure on rates

This is a serious problem that often flies under the radar, partly because it’s hard to conceptualize at the scale of the U.S. economy.

But imagine your family had so much debt that interest payments were your second-largest monthly expense. And instead of tightening your budget, you kept spending beyond your means.

Aside from the obvious long-term implications, this could spell trouble for stocks in the months ahead.

If investors back away from Treasuries, yields will rise. And as yields climb, stocks become relatively less appealing, prompting a rotation out of equities and into bonds.

The bottom line: This downgrade wasn’t just symbolic. It was a warning shot—and the bond market flinched.

STOCKS
2. Retailers Reveal Their Tariff Gameplan 🛍️

A wave of retailers reported earnings this week. Together, they offered a glimpse into the health of the American consumer—and how companies are bracing for the ongoing challenge of tariffs.

🏠 Home Depot

Strategy: Playing Offense

Despite a modest 0.3% drop in comparable sales, Home Depot $HD ( ▼ 1.27% ) beat overall revenue expectations and reaffirmed its full-year guidance.

The company says it won’t raise prices in response to tariffs. Instead, it's leaning on domestic sourcing (now over 50% of inventory) and plans to cut products that “don’t make sense” rather than pass along costs.

🧰 Lowe’s

Strategy: Holding the Line

Lowe’s $LOW ( ▼ 1.59% ) beat earnings and reaffirmed guidance, even as comparable sales dipped 1.7%. Management blamed unfavorable weather as a drag on sales, but also pointed to strength in professional and seasonal categories.

Like Home Depot, Lowe’s is holding off on price hikes—for now.

🛒 Target

Strategy: Stuck in the Middle

Target $TGT ( ▲ 2.2% ) missed on both revenue and earnings estimates, saw store traffic fall, and lowered its full-year forecast. Executives noted weak consumer demand, backlash over its DEI rollbacks, and tariff uncertainty as major headwinds.

Target’s mid-market positioning is also proving difficult. As more consumers trade down to value chains like Walmart and TJX, Target is feeling pricing pressure from all angles.

🛍️ TJX Companies

Strategy: Benefit from the Squeeze

TJX $TJX ( ▼ 1.11% ) (parent of T.J. Maxx, Marshalls, and HomeGoods) posted a 5% revenue jump and a 3% rise in comparable sales.

Despite tariff concerns, the company stuck to its full-year outlook. Roughly 60% of its merchandise comes from other retailers, leaving only 40% exposed to direct import costs.

The Big Picture

President Trump has made clear he wants companies, not consumers, to absorb tariff costs.

Some, like Home Depot, are playing ball. Others, including Walmart, Nike, and most automakers, are signaling that price hikes are coming.

The divergence in strategies raises an interesting question: Who will protect margins, and who will protect market share?

MARKETS
3. Big Tech Is Betting On Your Face 🕶️

After years of false starts, wearable tech might almost be ready for primetime—thanks to AI.

This month alone, Google, OpenAI, and Meta each unveiled major steps toward building a new kind of computing interface.

The vision? Wearables that can:

• Translate foreign languages in real time (e.g., read foreign signs)

• Recognize objects on the fly (e.g., identify a landmark)

• Provide navigation hands-free

• Take photos, send messages, and manage your calendar—all by voice

If that all sounds futuristic, it might not for long...

🔍 Google, still haunted by the ghost of Google Glass, announced a $150M partnership with Warby Parker to launch AI-powered smart glasses as soon as next year.

🧠 OpenAI fired back with a hardware bombshell. It’s acquiring io, the AI wearables startup founded by Jony Ive—best known for designing the iPhone, Apple Watch, iMac, and iPod. The $6.5B deal puts Ive in creative control of what could be the next iPhone moment.

📸 Meta, meanwhile, says it has already sold over 2 million Ray-Ban smart glasses. CEO Mark Zuckerberg teased a new lineup coming later this year, including Oakley Meta glasses and a higher-end model. Meta’s CFO added that voice commands are growing even faster than app engagement.

Bottom line: AI is reshaping how we interact with the internet—and possibly the devices we use to do it. The keyboard and screen may not be going away, but for the first time in years, they’re facing real competition.

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CRYPTO
4. Bitcoin Hits $112K As Institutions Buy In 💰

Bitcoin just touched $112,000 for the first time ever. The crypto king smashed through its old high from Inauguration Day and extended its rebound to more than 50% since early April.

But this isn’t just a crypto crowd rally anymore. This is Wall Street showing up with a checkbook.

On Monday, Jamie Dimon—CEO of J.P. Morgan Chase, longtime Bitcoin critic, and my former boss’ boss’ boss—finally gave in.

The firm will now allow clients to allocate to Bitcoin, with their positions visible on J.P. Morgan statements. No custody yet, but for the biggest U.S. bank ($4T AUM), it’s a major shift.

On Tuesday, another big name joined the party: Blackstone.

The world’s largest alternative asset manager just made its first-ever crypto investment, buying $1 million worth of Bitcoin. For a firm managing $1.2 trillion, that’s pocket change. But symbolically? Huge.

Meanwhile, BlackRock’s Bitcoin ETF has now seen 6+ weeks of daily inflows. The winning streak goes all the way back to April 9th, according to Farside Investors.

There’s progress on the policy side, too.

The GENIUS Act, a Senate bill creating a regulatory framework for stablecoins, is moving forward. While it doesn’t directly affect Bitcoin, it’s a clear signal from Washington that crypto is no longer fringe.

And down in Texas, lawmakers just passed SB 21. The bill still needs final approval, but supporters say it’s likely to pass before the June 1 deadline. If it does, Texas would become the third state (after New Hampshire and Arizona) to give Bitcoin an official home in state finances.

Bottom line: Bitcoin is having a moment. Prices are rising, adoption is spreading, and even the most risk-averse institutions are starting to dip their toes in. If you’ve been waiting for a sign of broader acceptance, this week delivered it in spades.

STOCKS
5. Guess That Stock 🕵️‍♂️

It once ruled American malls. Now it’s shuttering stores and fighting for relevance.

Can you name the stock?

1. While most traditional department stores have vanished from public markets, this chain remains one of just two mall-based retailers still standing.

2. This retailer peaked near $74 per share back in 2015. After years of e-commerce competition and changing consumer habits, it now trades below $12.

3. The business is in the midst of a turnaround plan called A Bold New Chapter, which includes closing 150 stores by 2026 and doubling down on its premium chains.

4. The firm delayed earnings last year after uncovering a $154 million accounting error that inflated executive bonuses over a multi-year period.

5. Just 14 analysts still track the stock, and nearly 70% rate it a Hold or equivalent, signaling little confidence in a fast rebound.

Got a guess? Tap here to reveal the answer → 

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