Last week's The Economist magazine showed an eagle battered by President Trump's first 100 days. We repeat our conclusion from a week prior: Contrarians of the world, unite! Our Roaring 2020s scenario might be back on track soon, observes Ed Yardeni, editor of Yardeni QuickTakes.
Previously, on April 20, we observed that The Economist had just featured three, consecutive, very-bearish cover stories. They suggested that the dollar might be on the verge of collapse and that so might the US stock and bond markets along with the US economy.
(Editor’s Note: Ed is speaking at the 2025 MoneyShow Masters Symposium Miami, May 15-17 at the Hyatt Regency Miami. Click HERE to register.)
But the S&P 500 Index (SPX) rose more than 7% from last Monday lows, the CBOE Volatility Index (VIX) dropped back below 28, and the high-yield corporate bond spread fell from 461 basis points a few weeks ago to 348 bps. The 10-year Treasury yield also fell 7 basis points last Thursday after Cleveland Fed President Beth Hammack told CNBC that the Fed could cut interest rates if the data deteriorated by the Fed’s June meeting. We still doubt that will happen.
Meanwhile, Treasury Secretary Scott Bessent is increasingly taking on more economic and trade responsibilities. Investors believe he is more like one of us given his hedge fund career. We think trade deals will need to be inked soon for the stock market to sustain its current bounce.
We still believe that the latest correction in the S&P 500 bottomed on April 8, a day before Trump basically postponed “Liberation Day.”
