Don’t Fight The Tape, But Not The Place To Get Overconfident
Epic rally in equities that are looking through everything.
Senate passes One Big Beautiful Bill and July 9th tariff deadline isn’t a real deadline.
Lots to think about with the slide in the U.S. dollar.
Window Of Vulnerability Opening Up
· Capital markets unphased by U.S. entry into Iran / Israel dispute.
· U.S. dollar and interest rates signaling a potential regime change is afoot.
· Some Fed officials breaking ranks and cracking the door for rate cuts.
Investors Are Becoming Complacent As Economic Activity Slows
· S&P 500 reclaims 6,000 as equities become dismissive of bad news.
· Positioning, sentiment, and valuations are no longer tailwinds.
· Idea generation and opportunities beyond broad-based U.S. equities.
Muddle Through With A Downside Skew
· Stocks rally for their best month in over a year, but are unchanged from early-November
· In its current form, the “Big Beautiful Bill” lacks a stimulative impulse
Year-to-date scorecard suggests the U.S. exceptionalism trade is fading
Going To Run Hot
· Debt downgrade treated with a yawn, but it does have structural importance for investors.
· Subtle shift from horrible to less bad pushes equities back near all-time highs.
· Bond yields are pushing up to levels that will bother equities.
· Investors should favor exposure to scarce vs. abundant assets.
A Reset On The Trade Front Warrants A Reset In Investment View
· A necessary and welcome reset on U.S. and China trade policy.
· U.S. equities have recovered all post-Liberation Day decline.
· Fiscal policy largesse not being reigned in matters.
Some Wondering Thoughts
· Equities have recovered all the post-liberation day sell-off.
· Deal headlines or the lack of will be the next catalyst.
· Market rally overlooking the negatives of this policy cocktail.
Stay Disciplined And Be Patient
Bear market rally or a fading flesh wound?
Sentiment and positioning could be a catalyst to push the S&P 500 up to pre-Liberation Day levels.
Risk/reward profile becomes less desirable between 5,500 – 5,800 on the S&P 500.
Money Goes Home
Equities rally on tariff reprieve.
Investors shouldn’t get complacent with this rally.
Things have changed.
Time to de-gross.
Time To Deploy Some Cash
· Carnage in the equity market is now hitting everything.
· Sentiment and technicals are reaching capitulation points.
· For those positioned for what transpired, it's time shift your mindset from defense to offense.
Don’t Focus On What’s Out Of Your Control
· S&P retested March 13th low of 5,500 this morning – it's an important level to hold.
· Growth scare is priced – recession risk is not.
· Friday’s jobs report will set the tone for recession watch.
Relief Rally, And Then What?
· A subtle walk back on tariff talk ignites a relief rally.
· Incoming data and policy moves will determine the extent and duration of this bounce.
· Diversification is no longer a dirty fifteen-letter word.
Respect The Global Shifts In Fiscal Policy
· The stock market is not the measuring stick for this administration.
· Trade feud with Canada sheds light on U.S. ambitions/strategy.
· Fiscal policy matters and the baton is being passed.
Don’t Count On A Trump ‘Put’…
Short-term pain for long-term gain – easier said than done.
Capital flows to where it's treated best.
Equities are likely close to short-term bottom, but unlikely to be ‘the bottom’.
Market Price Action Acknowledging Growth Scare
· Growth scare getting priced by markets.
· Atlanta Fed Q1 GDP forecast craters.
· Not the time to be a hero, it’s a time to carry less risk.
Rising Confusion And Uncertainty Starting To Bite
· Gold, the anti-uncertainty asset.
· Buffett’s cash pile and a chart that explains why.
· Market internals indicate a character change is underway.
Thinking Through Structural Change
· Stocks treading water at all-time highs, gold glitters, and bonds take a hot CPI in stride.
· Rumors of a potential Mar-a-Lago accord deserve some thought.
· Implications will be profound.
Push and Pull
· Equities awaiting a catalyst to push them out of a choppy trading range.
· Deficit math a threat to an ambitious Trump agenda.
· All that glitters is gold.
Tariff Man Is Back
· Asset markets are at risk of being disrupted by tariffs.
· Investors are better served by forgetting about the politics and thinking about outcomes.
· Would you have signed up for a 7 – 10% return entering 2025?