Co-Mind Morning Pulse – June 12, 2025
Co-Mind Morning Pulse – June 12, 2025
1. Market Mood
Markets are in a fragile balancing act between disinflationary relief and geopolitical anxiety. Yesterday’s soft U.S. CPI print (headline +0.1% MoM) reinforced the “Fed pivot” narrative, but enthusiasm faded as traders confronted rising oil prices, fading breadth in equity leadership, and renewed Middle East tensions. The mood is cautiously constructive but increasingly uneasy—too many things have to go right for current prices to hold.
2. Key Cross-Asset Moves
Equities: S&P 500 -0.3%, Nasdaq -0.5%, EuroStoxx 50 flat, Nikkei -0.7%. Risk-on start, risk-off close.
Bonds: U.S. 10Y yield ↓ 6bps to 4.41%. Curve steepened mildly. Strong demand at auctions.
FX: DXY at 7-week low. EURUSD above 1.15, USDJPY ↓ to 144. Risk-off supported JPY.
Commodities: Brent crude +4% to $69.8 on Iran fears. Gold firm near $3,400.
Crypto: Bitcoin surged to $110.4K before paring back slightly. Strong breakout momentum.
3. The Real Driver
Narrative dissonance is peaking.
The soft CPI print gave macro bulls the greenlight to price in imminent Fed cuts (September odds now ~70%), but this sits uncomfortably with:
Sticky core inflation components (shelter, services)
Ongoing tariff drag (average U.S. tariffs now ~15%)
Elevated equity valuations and a collapsing equity risk premium
Oil shock risks resurfacing from geopolitical flareups
Markets are pricing a dovish glidepath while geopolitical and structural inflationary pressures build—creating a dangerous feedback loop where each benign data point invites more risk, without pricing tail events.
4. What We’ve Learned
Disinflation is happening, but not cleanly. May CPI was soft, but under the hood rents are still firm and insurance costs keep rising. This was gasoline-driven disinflation, not structural.
Equity rally is broad in narrative, narrow in reality. The S&P is near highs, but more than 80% of stocks are still off their peaks. It's AI and mega-cap driven—everyone else is treading water.
Bonds look cheap vs equities. The S&P’s earnings yield is now ~4.5% vs the 10Y Treasury at 4.4%—an ERP close to zero. Historically, this level of complacency hasn’t lasted.
Europe and EM attracting real money. Largest monthly outflow from U.S. equities in a year ($24.7B) and strong inflows into Europe ($21B) and EM ETFs. A regime shift in global flows is quietly underway.
Crypto has resumed its leadership as a liquidity barometer. Bitcoin’s breakout is being driven by macro dovishness and technical confirmation. It’s acting as “digital gold” again—watch it as a real-time proxy for sentiment.
Oil is no longer behaving like a sleepy carry trade. Middle East risk is back in the tape, and the supply premium is being repriced. WTI’s ~20% bounce since early May now threatens to reflate inflation expectations.
The Fed-market gap is widening again. The Fed's dots still project cautious patience; markets are pricing a pivot. Someone’s wrong—and it won’t take much to snap that rubber band.
5. Final Thought
The market wants a soft landing with rate cuts, strong earnings, falling inflation, global peace, and valuation expansion—all at once. But the marginal signal is starting to turn defensive: narrowing leadership, safe-haven flows, and quietly rotating capital. The crowd is still chasing upside, but the smart money is hedging. The real opportunity may lie not in participating—but in preparing for the unraveling of this very delicate illusion.