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.
Market Commentary - May 5, 2025
“Sell In May And Go Away” – Perhaps Not
There is an old Wall Street adage to “Sell In May and Go Away”* based on the idea that stock market returns are historically weaker between May and October compared to the rest of the year. The notion is to avoid the summer months – but what if we can continue to rally from May through August? Such optimism may feel wrong, what with a “final” tariff policy still not clarified and confirmed, but remember: markets discount about six months in advance. Two signs of hope: the jobs report last Friday showed an ongoing robust labor market, and corporate earnings have been coming in much better than expected. Plus, the equity market has rallied sharply, and the breadth of the market (as based on the S&P 500) hit a new record high, which itself confirms the rally. The 14-week stochastic has also generated a buy signal. Barring any major setback on the tariff front, it is possible the lows are in, and the market will not test the lows. In our view, a summer rally is expected at this time.
Market Commentary - April 28, 2025
Trump’s First 100 Days (The Second Go-Round)
This week marks President Trump’s first 100 Days of his second presidency. Whether or not you’re a fan of his policies, you can agree that this has been a period in American history that will never be forgotten. Liberation Day on April 2 resulted in one of the fastest and sharpest declines in the equity market. It felt like a mini crash. But we did get capitulation (i.e., excessive selling that marks a bottom), and the market has since rallied sharply, up15% off the low. Year-to-date, however, the S&P 500 is still down 6% with the Nasdaq 100 down 7.5%. Interest rates on the 10-year Treasury yield did spike higher as stress and selling hit this market as well – but rates have since eased and are again falling. We believe tariffs are now priced into the markets, but volatility is likely to remain until we have a finalization of tariffs.
Market Commentary - April 21, 2025
Temporarily Interrupted
Trump’s tariffs are continuing to cause volatility in the markets, and we suspect this will continue for a few more months. The good news is that the current pullback is holding the secular bull market uptrend; the bad news is that the April 7th lows of the market will need to be tested. This is where we get volatility, and lows take time to test, which can range from one month to four months. We do have high confidence that the lows will be successfully tested and, within the next twelve months, the S&P 500 will be at new record highs.