Mr. Market Says The War Is Over

The S&P 500 is now up 1.3% since Friday, February 27, the day before Gulf War III started (chart). So as far as the stock market is concerned, the war is over until further notice. The index will be at a new record high tomorrow if it increases by more than 11.22 points! It has been yet another V-shaped buy-the-dip recovery in the S&P 500. It has also been another buying opportunity arising from a geopolitical crisis, as we previously observed when we called the March 30 bottom the following day.

It has also been another momentum-led rebound, similar to last year's explosive rally that started on April 9, when President Donald Trump postponed his Liberation Day tariffs (chart). The S&P 500 equal-weighted index has underperformed the S&P 500 market-weighted index so far. Since the latest pullback bottomed on Monday, March 30, the former and the latter have risen 6.1% and 9.8%, respectively. Over this same period, the MAGS ETF is up 14.8%, while the XMAG ETF is up 8.1%.