Pal Market Macro Review - May 16th one ⃣ Powell's farewell, Warsh's debut, 30-year bond 5%+is the new 'valuation anchor' The dust of the Federal Reserve's transition has settled: Powell officially stepped down today, and hawkish representative Kevin Warsh is about to be sworn in. Although Powell was appointed as the "acting chairman" during the transition period, the management of market expectations has shifted. Warsh taking office means that the expectation of "higher and longer" interest rates will be strengthened, and do not bet on any possibility of interest rate cuts in the short term. Moreover, Powell's final statement before leaving office advocated that the size of the Federal Reserve's balance sheet should not be reduced, and Fed Governor Barr also explicitly opposed the reduction of the balance sheet. Pay attention to the internal strife within the Federal Reserve The yield of 30-year US Treasury bonds has exceeded 5%: this is the most crucial pricing signal today. The 10-year yield has soared to 4.60%, reaching a new high since February 2025. In history, for every 25bp increase in 10-year US Treasury bonds, the valuation of the Nasdaq will shrink by 5-8%. Economic data 'double-edged sword': Industrial output in April increased by 0.7% (far exceeding expectations of+0.3%), the Empire Manufacturing Index surged to 33.5 in the 6-month outlook, and price payments and new orders both hit multi-year highs. The fact that the economy does not decline is a good thing, but it also means that inflation stickiness is extremely strong, indirectly supporting the narrative of 'higher and longer interest rates'. Summary: At present, it is a typical game period where the fundamentals are not bad, but interest rates are pressing down on valuations. Now it's not a collapse, but a game window of "strong profits+interest rate pressure on valuation". Suggest taking profits instead of clearing positions. two ⃣ Multiple institutions Q1 13F centralized disclosure ·Renaissance: Establishing position in AAPL, increasing holdings in NVDA+190%, liquidating position in AMZN ·Druckenmiller: Heavy holding NTRA, holding TSM and STM ·Consensus: AI infrastructure (NVDA/NVDA/TSM) is the common mainline of institutions ·Suggestion: Follow institutional trends and add positions to NVDA/TSM during pullbacks three ⃣ The US stock market experienced a sharp decline across the board, with international oil prices soaring sharply ·The US stock market has experienced a wave of selling, with all three major indices falling more than 1%. Most large technology stocks have fallen, and US chip and optical communication concept stocks have collectively suffered heavy losses. ·International oil prices have surged significantly, with WTI crude oil futures up over 4% in June contracts. US bond yields have soared, making bonds more attractive to high-risk stocks amid rising energy prices and increasing concerns about long-term inflation, leading to a withdrawal of funds from the US stock market.