Market Commentary - June 2, 2025
Market Tug Of War: Tariffs Vs. AI
The equity market has been in a tug of war between pricing in tariffs and pricing in artificial intelligence (AI). In our view, the AI trade is back and the equity market has already priced in the tariff trade.
Market Commentary - May 27, 2025
Tariff Tantrums Are Back
Equity markets were marching along happily up until last week when President Trump set off a new volley of tariff tantrums, again causing volatility – but the pullback in equities was modest. It appears markets are getting used to the tariff negotiations and they are not reacting as violently as they did following Liberation Day (April 2). Over the weekend, President Trump delayed the EU tariffs until July 9th and markets are responding positively. Expect volatility to continue. Short-term markets are overbought with weakening momentum and approaching record highs, so it is normal to have some choppiness (ups and downs). We still believe we are in the start of a summer rally, and that it is possible to be at record highs this summer. Such a move would be one of the biggest surprises this year – outside of the tariffs. Short-Term Equities Are Overbought And Losing Momentum… In the short term, with stocks rallying over 20% from the April 7th lows, they now appear overbought and are losing momentum. This points to a correction or choppiness, but the pullback should be mild.
Market Commentary - May 19, 2025
A Potpourri Of Thoughts On The Economy & Markets
There is no sign of an economic contraction and the bear market in stocks has now turned back to a Bull. There remain many concerns over tariffs and what they mean for the economy and investments, but currently, we don’t see any major negatives. In fact, we see the opposite. We expect a summer rally, and this rally could test the record highs and even make new highs. But as the market approaches the highs, we expect choppiness to return. It takes time for a market to challenge its old highs. But if the data continues to be positive, we could be sitting with new highs this summer. If the market can break and hold new highs, the target for the S&P 500 would move to 6400. This would be a nearly 7.5% return – so, once again, we see that patience is the virtue of investing.
Perspectives - May 15, 2025
Can The Market Bear So Much Bullish News? The Corner May 2025
We believe the tariff shock of Liberation Day (April 2) was front-loaded. Most of the damage to the equity markets seems to have been completed after about a week, with the S&P 500 hitting a low of 4835 on April 7. Since then, the S&P 500 has not only rallied into resistance near 5600-5700 (just below its 200-day moving average), but it has broken above those levels to a modest gain year to date.
Market Commentary - May 14, 2025
Chart Book April 2025
The U.S. economy shrank by 0.3% in the first quarter of the year - the first contraction in three years - largely due to a surge in imports as businesses rushed to beat incoming tariffs.
Market Commentary - May 12, 2025
Monday Opens With China Trade Deal – Equities, Yields, Oil, Bitcoin Up, Gold Down
We have been of the view that the April 7th low of 4835 on the S&P 500 was the low, and we did not have to test it based on the strength of the equity market rally. We have had buy signals for weeks on the equity market and continue to get more. On Monday morning, we woke up to a temporary deal on tariffs with China for 90 days. Stocks, yields, oil and bitcoin are rallying sharply, with gold falling. We believe this deal will allow the equity markets to rally into the summer, with the S&P 500 likely to test the all-time high of 6147. We maintain a 12-month forecast on the S&P 500 of 6550, so we remain buyers of this market.