The Quiet Rotation

I’m Gökcan, and this is Portfolio Activity — a personal, independent, and subscriber-supported investing journal. Each day, I break down the key market moves, big-picture insights, and the smartest perspectives from across the investing world — and then share my take.

—American Companies Tap Europe for Cheaper Loans

You can usually feel the early signs of capital flight long before the headlines say “exodus.” Lately, one of those signs is popping up in a place most U.S.-centric investors don't look: the European bond market.

Over the past few weeks, we've seen several converging signals: the dollar took another leg down following the House’s approval of a deficit-expanding budget, and trade war rhetoric kicked back into gear this time, with specific threats targeting Apple and the European Union. Layer on last month’s recession scare and the jitteriness around foreign appetite for U.S. assets, and suddenly the global bond landscape doesn’t look so dollar-dominated anymore.

The result? A rising number of U.S. corporations are now issuing bonds in euros instead of dollars. It's not just opportunistic borrowing. It reflects a multi-pronged calculus.

Yes, eurozone yields are lower, offering cheaper financing. But there’s also growing belief among issuers that the dollar may continue to weaken—making euro-denominated liabilities relatively cheaper over time. Meanwhile, the European fixed income market itself is evolving, with improved liquidity and depth that offers credible scale for large U.S. issuers. It's no longer just a niche sideline it’s becoming a strategic financing venue.

Think of it as corporate treasurers quietly repositioning while the rest of the world is still watching Fed minutes. If liquidity, value, and long-term outlook are tilting even slightly in favor of Europe, that signals more than just a tactical move. It’s a reflection of growing caution about the U.S. debt and policy outlook—and an early pivot toward global diversification.

This doesn’t mean the U.S. bond market is losing its anchor status. It's still the largest and most liquid in the world. But it does mean we're seeing a slow broadening of capital flows, especially when geopolitical tensions and dollar outlook risks resurface. And every time a U.S. firm chooses Frankfurt over New York, it chips away at the assumed dominance of the greenback in corporate debt.

For investors, this means watching where debt is being raised not just how much. The currency and geography of bond issuance may become just as telling as its yield. And for anyone still treating Europe as a sleepy corner of the bond market, it might be time to wake up.

—The AI Boom Is Powering Up Utility Stocks

While the market obsesses over chips and software earnings, something less obvious but equally critical is lighting up—literally. The real infrastructure behind the AI and cloud boom isn’t just semiconductors or servers. It’s power.

We’ve seen it this earnings season. Constellation Energy’s leadership described the current environment as “very favorable”—and it’s not hard to see why. Cloud workloads remain strong at Alphabet and Microsoft, and both companies are investing deeply in compute-heavy AI. Add Tesla’s latest push on autonomous driving into the mix and you have a trifecta of high-intensity energy consumers reshaping the grid's future.

Power isn’t just a background utility anymore. It’s becoming a real-time indicator of tech growth. Data centers, AI model training, and smart mobility are no longer side stories—they're core demand engines, and that demand needs electricity. A lot of it.

That backdrop is already helping utilities like Constellation (CEG) and Dominion Energy (D) rebound from steep April declines. While still below their late-2024 peaks, the directional shift is worth watching. And they’re not moving on sentiment alone—the fundamentals are quietly firming up.

But what really stood out last week was the policy development: President Trump signed an executive order aimed at accelerating the construction of new nuclear plants. That’s a meaningful pivot. Nuclear remains the only scalable, 24/7 clean energy source that can match the always-on demands of AI infrastructure. While politics will always swirl around nuclear, this executive signal gives the sector fresh oxygen—and investors are taking notice.

From a positioning standpoint, this could be the start of a subtle re-rating of the utility space. Not just as yield plays, but as enablers of next-gen tech infrastructure. Especially as ESG sensitive capital warms to nuclear in light of decarbonization goals, this creates an unusual blend of growth, policy support, and grid necessity.

The critical question is: can the grid keep up?

If power becomes a bottleneck, it could cap AI scalability in ways few investors are pricing in. At the same time, it offers exposure to a growing “picks and shovels” theme where utilities and nuclear quietly become the infrastructure behind the AI gold rush.

—Consumers Look Up, Businesses Hold Back

As May wraps up, the market gets a data double feature: a soft rebound in consumer confidence, and a surprisingly weak core capital goods number. Together, they paint the kind of bifurcated picture we’ve come to expect in this post-pandemic, pre-recession limbo.

The modest uptick in consumer confidence might seem like a win at first glance, especially after five straight months of decline. But context matters. Sentiment is still near five-year lows, and more alarmingly, inflation expectations are climbing again.

That number 7% expected inflation over the next year is what I’m watching more than the headline confidence figure. It tells you what consumers feel, not what they say.

That’s a critical distinction, especially when you line it up next to the durable goods numbers. While headline orders weren’t as ugly as feared, the real story is in core capital goods. This category strips out defense and aircraft—giving us a cleaner read on business investment and the -1.3% drop is well below expectations. Companies aren’t spending on growth. They’re in a wait-and-see mode, which doesn’t bode well for productivity or longer-term resilience.

From a market perspective, this kind of divergence is tricky. Consumer-driven sectors may get a near-term boost, especially retail and services. But if capital investment continues to stall, it's hard to see how earnings can sustain growth through the back half of the year especially with rates still elevated and inflation sticky.

My take?

—NVIDIA Takes the Stage

It’s been a surprisingly solid earnings season. With nearly every S&P 500 company having reported, first-quarter results came in stronger than most expected. Earnings per share are on track to grow more than %13, and a healthy majority of companies have topped analyst forecasts. That beat rate is even slightly better than what we've seen over the last decade.

Some of the biggest gains came from communication services and health care. These sectors each posted over %30 earnings growth, showing strength across very different parts of the economy. From big tech platforms to pharmaceutical firms, the story this quarter has been resilience.

Still, one name could change the tone overnight.

NVIDIA reports after the close tomorrow. This is the moment the market has been circling on the calendar. As a central player in the AI boom, NVIDIA carries more weight than most. Investors will be watching not just the numbers, but also the tone of the guidance.

Confidence is high right now, but so are expectations.

Looking further out, earnings estimates have been pulled back a little, but the market still expects close to %9 growth for the full year in 2025. That’s reasonable if the economy continues to hold up and inflation stays contained. The backdrop looks steady, but not bulletproof.

Return on Equity (ROE): 119.18%

P/S Ratio: 25.32

EPS Growth TTM: 146.26%

Relentless profit generation (ROE) → market’s sky-high valuation (P/S) → justified (for now) by explosive earnings growth (EPS Growth).

—Tariff Timeout

The market didn’t take Friday’s tariff threat lightly. After President Trump floated the idea of a %50 levy on EU imports, the S&P 500 and Nasdaq both sank, snapping what had been a fairly calm stretch.

Trade policy, once again, jumped to the front of the line as a driver of market action.

Then, over the weekend, the tone shifted. Trump extended the EU tariff deadline to July 9, citing productive talks with European Commission President Ursula von der Leyen. Tuesday’s market bounce reflected the sense of temporary relief, but no one’s mistaking this for a resolution.

This is a familiar pattern now threaten tariffs, markets react, then dial it back just enough to buy time. But the underlying uncertainty hasn’t gone anywhere.

With the 90-day pause on the April 2 tariff batch also nearing its end, the early weeks of July could easily bring another round of headline whiplash.

Still, it’s worth noting that the worst-case trade scenarios seem less likely than they did a year or two ago. There’s fatigue in the markets for policy drama, and a growing sense that both sides know the cost of escalation. That may not mean a breakthrough is coming, but it does suggest both parties have incentive to keep talking.

This is a time to stay light on assumptions and heavy on flexibility. Volatility tied to policy is hard to predict and often short-lived—but it can knock portfolios around if you're not positioned for it.

As we move closer to the July 9 deadline, the key is not just whether tariffs are implemented, but what the tone of negotiations reveals. If trade talks turn sour, defensive assets and cash might get a bid. But if cooler heads prevail, it could remove a layer of risk that's quietly been weighing on sentiment.

—General News

US–EU Tariff Deadline Extended

President Trump’s decision to delay EU tariffs until July 9 gives markets a short-term breather, but the threat hasn’t disappeared.

The EU’s willingness to speed up negotiations signals both sides are aiming to de-escalate, though fragile dynamics could resurface.

We may see a bounce in transatlantic-exposed stocks, but positioning too heavily could backfire if talks stall or sour.

Japan Eyes a Tariff Deal and Bond Shift

Japan is seeking a tariff agreement with the U.S. by June while also considering cuts to long-term bond issuance.

This dual-track effort points to a government trying to stabilize its economy through trade while managing fiscal strain.

A drop in long-duration supply could shift global bond curves, while a tariff deal would boost Japanese exporters and U.S.-linked supply chains.

Iran Nuclear Talks Hit a Wall

While some progress was made in U.S.–Iran nuclear talks, the lack of a breakthrough means oil markets stay tight.

This limbo benefits energy producers, but also keeps inflation pressures simmering. A sudden deal could reset oil prices and ripple across sectors—energy traders should stay nimble, not anchored.

Budget Friction in Washington

Senator Ron Johnson’s comments hint at growing Republican resistance to passing the reconciliation bill without sharper spending cuts. The standoff adds another layer of uncertainty to an already fragile fiscal environment.

Delays in infrastructure or defense funding could shake investor confidence, especially in sectors reliant on federal budgets.

Trump Pushes Industrial Reorientation

In a brief remark, Trump expressed a preference for the U.S. to produce advanced tech and military goods instead of apparel.

While off-script, this mirrors broader industrial reshoring trends and rising focus on strategic manufacturing. Defense and semiconductor firms remain well-positioned if this rhetoric feeds into actual policy.

Russia Condemned, Sanctions in Sight

Trump’s public criticism of Putin’s actions in Ukraine, coupled with a suggestion of more sanctions, ratchets up geopolitical pressure.

This could elevate risk premiums in energy, grain, and European defense markets. It’s a reminder that global tensions can surface fast exposure to commodities and defense assets may serve as a hedge.

—Company Spotlight

Nvidia is tactically adapting to U.S. export controls by launching a lower-end Blackwell chip in China, preserving market share while staying compliant an important signal for the global semiconductor landscape and geopolitical tech balance.

Tesla’s Elon Musk is doubling down on operations, signaling urgency as European sales stumble.

His renewed focus on Tesla and xAI suggests key product rollouts are at stake, raising execution risk and volatility for investors.

Trump Media & Tech’s plan to raise $3 billion for crypto investments is a bold, speculative move that could stir meme stock mania and regulatory scrutiny, with sentiment likely to drive short-term price swings.

Bank of Nova Scotia’s share buyback plan and dividend hike reflect confidence in its capital base despite rate uncertainty, offering a supportive read-through for Canada’s broader banking sector and yield-focused investors.

AMC shattered revenue records over the Memorial Day weekend, hinting at a real recovery in theater traffic and ancillary sales.

It’s a rare burst of fundamental strength that could shift sentiment in this heavily shorted name.

AstraZeneca received EU backing for Imfinzi in bladder cancer, reinforcing its lead in oncology and unlocking meaningful market potential.

The approval marks another step in biopharma's push toward earlier-stage immunotherapies.

Biogen’s RNAi collaboration signals strategic diversification after volatility in its Alzheimer’s franchise.

It adds potential M&A interest and investor focus on next-gen biotech modalities.

Chevron secured a narrow U.S. license to operate in Venezuela, potentially unlocking additional oil flows if diplomatic thaw continues adding a new layer of complexity to global energy dynamics.