MARKET CALL: Meltup Again? (Do We Have Nothing To Fear But Nothing To Fear?)

The stock market has become tariff-scare-proof now that the S&P 500 is only 2.3% below its February 19 record high despite Trump's Tariff Turmoil (TTT) since then. After Friday's better-than-expected employment report, the stock market has also become recession-scare-proof. According to Polymarkets, the odds of a recession were back down to 27% on Friday from a recent peak of 66% on May 1 (chart).

The stock market might become inflation-scare-proof on Wednesday, if May's CPI inflation rate turns out to be as subdued as estimated by the Cleveland Fed's Inflation Nowcasting, i.e., 2.4% y/y. On May 19 we wrote, "So the odds of our Roaring 2020s scenario is back up to 75%. In this scenario, the S&P 500 rises to 6500 by the end of this year. It could keep going to 7000 in a meltup."