The Stock Market Has Calmed Down

If the U.S. Dollar continues to be devalued over time—and one day loses its status as the world’s reserve currency—it wouldn’t be some overnight collapse. It would be gradual, subtle at first… and then all at once in terms of how it impacts everyday life and portfolios.

For decades, the U.S. has benefited from being “the cleanest shirt in the dirty laundry.” Global demand for dollars and Treasuries has allowed us to borrow cheaply, run persistent deficits, and still maintain confidence. If that dynamic shifts, the first place you’ll feel it is in interest rates. Structurally higher rates would become the norm, not the exception—impacting everything from mortgages to business expansion to government spending.

At the same time, inflation would likely be more stubborn. A weaker dollar means we import inflation—plain and simple. Goods cost more, energy becomes more volatile, and the purchasing power of cash quietly erodes. That’s where many investors get caught off guard… holding too much cash or fixed income that looks safe on paper but loses ground in real terms.

There’s also a bigger-picture shift that doesn’t get talked about enough: capital flows. If global investors begin diversifying away from the dollar as the primary reserve, money doesn’t just disappear—it goes elsewhere. That could mean more volatility in U.S. markets and more opportunity (and risk) abroad.

From a planning standpoint, this isn’t about fear—it’s about positioning. Environments like this tend to reward:

• Real assets that can adjust with inflation

• Businesses with pricing power

• Global diversification, not just U.S.-centric exposure

• Income streams that can grow, not stay fixed

The reality is, reserve currency status is earned over time—but it’s not permanent. And while the U.S. still sits in a position of strength today, the best financial plans aren’t built on assumptions… they’re built on preparation.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

We continue to be buffeted by headline after headline. Something constructive happens and we move up, something grim happens and we fall. Like everyone, I’d love to just know what’s going to happen and position accordingly but my crystal ball broke long ago.

I understand the desire for certainty, but uncertainty is the price you pay to make excess returns. If you want a sure thing, buy Treasury bills. You get an excess return because you’re getting paid for that uncertainty. The only question is where on that risk spectrum you choose to participate.

Personally, it doesn’t bother me to be relatively early to take risk. I think a frequent good point to take risk is where bad news has been getting priced in a lot, then that starts to slow down. The asset is oversold as everyone has gotten out before it falls further. Bad news may not hurt so much, anymore.

That’s not a recipe for guaranteed gains, of course, that recipe doesn’t exist. It’s more about getting the odds more on your side. Let’s say the market has been pricing 80% odds of something bad happening and you think that’s shifted to 50% odds. It may be a coinflip, but the upside is priced too cheaply, so you’re buying 50 cents for 20 cents. You may lose half the time, but if you spend 20 cents and make a dollar half the time, you’re going to win over time.

Let’s bring that to what’s going on right now. First, you need to figure out what’s really driving price. I think the basic story of March was stagflation fears shifting rate expectations from cuts to hikes. As that’s gone away, and cut expectations are coming off, we need to figure out what’s driving price now. That’s why I’ve spent so much time about what, exactly, is driving markets.

I’ve talked about several things, from short-term interest rates to the dollar to oil and more. At this point, the market has generally calmed down, in terms of downtrends ending. The main place where uncertainty and worry remain highs strike me as oil markets, so that’s what I’m mainly watching.

In general, I think a market focus is a particularly good idea when dealing with newsy markets. I see a lot of people selling or buying because some news story came out. That’s a great way to get whipped around and find yourself out of position, potentially absolutely convinced a coinflip is a certainty because of what you heard.

Instead, deal with numbers. Looking at today, we have continued threats of Middle East escalation. What’s that doing to markets? Near-term oil prices are heading up but if anything, I’m seeing more downward pressure going out on the curve. Maybe the futures market thinks the odds for a deal are up a bit? More broadly, stocks are up a bit and bonds are off lows. That’s not panic. That looks more like a market that’s watching, waiting, and maybe feeling just a little more constructive.

This definitely isn’t magic. It’s entirely possible that despite the market relaxing a little today and in the past few days, Trump decides to escalate further and we head down. I just think following the money is a smarter way to deal with the market than picking your favored news channel and rooting for what they say. If you want to increase how much and how often you make money in the market, pay primary attention to how the numbers are changing, not a favored narrative.

ISM Services was weak. at 54 vs. exp. 55. On the bright side, that’s still fairly strong but Prices Paid (70.7 vs. prev. 63) and Employment (45.2 vs. prev. 51.8) are going the wrong way. Ultimately, we need a strong consumer to keep assets up. Hopefully we don’t see further deterioration, next month.

Tonight at 8PM EST is Trump’s deadline for Iran to make a deal.

Thump said he may delay attacks in Iranian infrastructure if he sees real signs of a deal. Of course.

US Medicare and Medicaid Services raised payments to health insurers up to 2.48%, in turn sending providers such as United Healthcare (UNH) up 7%..

Samsung Electronics released preliminary results forecasting a more than eightfold increase in operating profit.

Broadcom (AVGO) will supply custom AI chips for GOOG and additional computing capacity for Anthropic, sending shares up 4%.

ADP Employment and Durable Goods Orders, today.

What does it all mean? The big deadline is tonight and we’ll see what things look like tomorrow!

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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