ECONOMIC WEEK AHEAD: JUNE 1-5

The S&P 500 climbed to another record high on Friday, closing at 7,580.05. Fabulous earnings momentum (FEMO) and falling oil prices boosted stock prices. Brent crude settled at $92.05 a barrel, the lowest weekly close since April 17. Axios reports that the US and Iran have reached a ceasefire-extension deal, pending President Trump's approval. The odds that the US blockade of the Strait of Hormuz will be lifted by June 30 are up to 68% from 42% on May 20.

The 10-year US Treasury yield fell 12 basis points for the week to 4.45% (chart). So far, the bond yield continues to follow our "Old Normal" script. The 10-year Treasury yield has been range-bound between 4% and 5% since mid-2023. That was also its range (with a few brief exceptions) from 2001 to 2007 before the Great Financial Crisis and the Great Virus Crisis.