Digital Reserve
US stocks turned higher as investors weighed the impact of President Trump’s newly passed tax-and-spending bill against rising concerns over the ballooning US deficit.
The S&P 500 and Nasdaq rose 0.4% and 0.8%, respectively, boosted by a tech rebound and easing bond yields, while the Dow added over 150 points.
The Congressional Budget Office pegs the cost at nearly $4 trillion, stoking fears of fiscal instability.
Bond markets reflected that anxiety, as the 30-year Treasury yield briefly touched 5.14%, its highest since 2023.
Solar stocks like Sunrun plunged, dragging energy and utilities lower, while communication services outperformed.
We talked about the U.S. government bond market yesterday, where there has been increasing scrutiny about supply outpacing demand - both related to continued government deficit spending.
And this highlights the unsustainability of not just U.S. sovereign debt, but bloated global sovereign debt.
But as we also discussed, the U.S. is working on a solution that will create a distinct edge, relative to the rest of the world, in ensuring robust demand for its debt.
The solution: a regulated, Treasury-backed dollar stablecoin. The legislation is progressing on this, and it will;
shore up the dollar's dominance in the world,
create a brand new, and very deep source of demand for U.S. Treasuries.
Not only will this move by Congress ensure the dollar remains the world's reserve currency, the dollar will become the world's digital reserve currency.
So, people, businesses and governments from around the world will be able to own U.S. dollar stablecoins (effectively hold U.S. dollars) without the friction of opening a U.S. bank account or going through the U.S. financial system - they get instant and virtually free (no wire fees, no spreads) access to the stability, trust and liquidity of the dollar.
The question is, as global capital will flow into the borderless dollar stablecoin, what will happen to foreign asset markets? What will happen to bitcoin?
On May 17, 2025 we at Gryning posted → Understanding Gryning Trader → within which we attached Trend Signal Chartbook showing trade ideas as flagged up by our Global Trend Model. The chartbook indicated a potential market top and showed the likely path forward for 19 liquid stocks/etf’s.
The table below shows how the trade ideas have fared so far…
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