On Friday, May 16th, the markets wrapped up a stellar week with a burst of energy. Economic data rolled in, and U.S. Treasury yields kept sliding, giving stocks a nice tailwind. By the closing bell, stock indices were all in the green, putting a perfect bow on a robust week.
The S&P 500? Up a solid 5.3% for the week. The Nasdaq? Even better, soaring 6.87%. What fueled this? Global trade tensions eased, sparking a rush of risk appetite. Plus, corporate earnings came in stronger than expected, lifting spirits across the board.
Technically, the S&P 500 was a beast, holding firm above its 5-day moving average and relentlessly pushing through resistance. Everyone trying to call the top of this short-squeeze rally? They’ve thrown in the towel. A true short squeeze doesn’t care about your predictions—it flattens every barrier, defying what you thought was impossible. If you could see it coming, it wouldn’t be a short squeeze.
Even when the University of Michigan’s consumer confidence index tanked to its second-lowest level ever, with inflation expectations spiking to decades-high levels, the market didn’t flinch. No dip, no fake-out—just steady gains through the day. Investors seem numb to soft data now, and when the market’s in short-squeeze mode, nothing stops it short of a major shock. Bears get crushed, forced to cover, pushing prices even higher.
This market’s in a mood where bad news gets shrugged off—or spun into good news. It’s all about sentiment and technical strength right now. That vibe’s flipped the script for big players. Barclays, joining Goldman Sachs, JPMorgan, and Bank of America, just bumped up their U.S. growth forecasts, pegging this year’s GDP at 0.5% and next year’s at 1.6%. That’s in line with Atlanta Fed President Bostic, who sees growth between 0.5% and 1% this year. Most agree any slowdown’s likely to hit in the second half, with Q2 still looking rosy—New York Fed’s got it at 2.35%. Soft landing hopes are climbing, but risks linger.
Then Trump dropped a bombshell, saying he’ll set new trade tariffs unilaterally in a few weeks, skipping the usual country-by-country talks. Is the White House fed up with slow negotiations? Or is this just pressure tactics? Either way, it could reignite trade tensions. But the market? Crickets. Investors seem to think Trump’s bluffing, betting he’ll stick to a modest 10% tariff. That kind of blind optimism feels like déjà vu—reminds me of the lead-up to the April 2nd tariff deadline. Trump might be signaling turbulence ahead. Buckle up.
The V-shaped rebounds in U.S. stocks lately hammer home the old saying: bull markets run long, bear markets burn out fast. You can guess the bottom in this market, but good luck picking the top. Every time stocks crash, no matter how grim it looks, they pull off a miracle recovery. Short squeezes hit like lightning—question the logic all you want, but you can’t deny the market’s raw power to bounce back.
Behind it all is America’s iron will. Call it the Fed’s put, the White House’s put—whatever. It’s not folklore; it’s the system’s built-in safety net. With household wealth and pensions tied to stocks, a market collapse would ripple through bonds, banks, and credit. Neither the Fed nor the White House can let that happen. I wrote about this in an April 27th newsletter, and it’s worth repeating.
Since the Fed unleashed QE, the game’s changed. Forget the 2008 or 2000 playbooks—those are relics. Clinging to old crash memories could make you miss the next big buying opportunity when the S&P drops 20% or 30%. That’s not a green light to pile in at these highs, though. Valuations are steep, and there’s no clear signal to buy or short. What I’m saying is, when the next real bear market hits, bring courage and cash, not fear and baggage.
Now, let’s talk 13F filings. Q1 showed institutions playing it safe. Berkshire Hathaway sold stocks and hoarded record cash. Even with Trump’s deregulatory buzz, Buffett dumped Citigroup, Brazil’s Nubank, and trimmed Bank of America and Capital One. Bridgewater slashed SPY, Google, and Nvidia, loading up on gold ETFs—super defensive. Michael Burry? He went nuclear, clearing out nearly everything except Estée Lauder, $Estee Lauder(EL)$ , where he doubled down on 200,000 shares, and bought puts on Nvidia and Chinese stocks. That’s either genius foresight or a wild swing, but it’s classic Burry—remember “The Big Short”? Soros Fund trimmed UnitedHealth $UnitedHealth(UNH)$ but stacked up on puts, likely cashing in on its April-May tumble.
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