5 reasons current market is more akin to "new bull market" rather than late cycle. Array ( [cookie] => 6ba9e0-e95b8a-a85414-fa657c-77e290 [current_usage] => 1 [max_usage] => 2 [current_usage_crypto] => 1 [max_usage_crypto] => 2 [lock] => [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 187370 [user_id] => [reason] => Usage under limits [method] => ) 1 and can accesss 1

VIDEO: While there might be turbulence in the next few days given steel tariff increases and Ukraine attacks, we discuss 5 reasons we believe we are closer to “early cycle”

Please click below to view our Macro Minute (duration: 5:43).

Over the weekend, the ratcheting up of steel tariffs to 50% and the Ukraine attack on Russia airbases might rattle markets near-term. But in our view, these will prove to be “buy the dip” opportunities:

• Taking a step back, we believe we are more akin to “start of a new bull market” rather than late cycle of a top. And while there are multiple factors, here are 5 reasons to consider:
  – ISM still below 50: more consistent with “early cycle”
  – Housing deficit this cycle: 1.7 million shortage of homes past decade
  – NYSE Finra Margin Debt: declined $90 billion since Jan, not consistent with “top”
  – AAII Sentiment: -21 6m avg. Always +5 to +29 6m avg at “top”
  – Still most hated rally
• On ISM, in the past 20 years, no bull market topped with ISM still below 50, which is where it is today. In fact, when ISM is below 50, these are periods of mid-cycle for stocks (see below).
• Over the past 10 years there is a shortage of 1.7mm homes cumulatively as 13.5mm starts vs 15.2mm household formations. We expect a stock market cycle peak closer to a housing cycle peak.
• Finra Margin Debt has fallen in each of the last 3 months and down -$90 billion. This is not what we see at market tops.
• AAII sentiment is still -21 6m avg. Since 1995, each of the major stock market tops (see below) coincided with this average >0 ranging from +5 to +29 (6M rolling avg).
• As for macro data, there is a lot but the key is the May jobs report on Friday:
  – 6/2 Mon 9:45 AM ET: May F S&P Global Manufacturing PMI    52.3e
  – 6/2 Mon 10:00 AM ET: May ISM Manufacturing PMI    49.5e
  – 6/2 Mon 1:00 PM ET: Powell Gives Opening Remarks
  – 6/3 Tue 10:00 AM ET: Apr JOLTS Job Openings    7063ke
  – 6/3 Tue 10:00 AM ET: Apr F Durable Goods Orders MoM    -6.3%e
  – 6/4 Wed 9:45 AM ET: May F S&P Global Services PMI    52.3e
  – 6/4 Wed 10:00 AM ET: May ISM Services PMI    52.1e
  – 6/4 Wed 2:00 PM ET: Jun Fed Releases Beige Book   
  – 6/5 Thu 8:30 AM ET: 1Q F Nonfarm Productivity QoQ    -0.8%e
  – 6/5 Thu 8:30 AM ET: Apr Trade Balance    -67be
  – 6/5 Thu 8:30 AM ET: 1Q F Unit Labor Costs    5.70%e
  – 6/6 Fri 8:30 AM ET: May Non-farm Payrolls    125ke
  – 6/6 Fri 9:00 AM ET: May F Manheim Used Vehicle Index
• We are close to the “blackout” period for the Fed. So a lot of Fed speak this week. Powell speaks Monday at a conference:
  – 6/2 Mon 10:15 AM ET: Logan Participates in Moderated Q&A     
  – 6/2 Mon 12:45 PM ET: Goolsbee Participates in Moderated Q&A      
  – 6/2 Mon 1:00 PM ET: Powell Gives Opening Remarks    
  – 6/3 Tue 12:45 PM ET: Goolsbee Participates in Moderated Q&A      
  – 6/3 Tue 1:00 PM ET: Cook Discusses Economic Outlook      
  – 6/3 Tue 3:30 PM ET: Logan Gives Opening Remarks at Fed Listens     
  – 6/4 Wed 8:30 AM ET: Bostic, Cook Moderate Fed Listens Event   
  – 6/5 Thu 12:00 PM ET: Kugler Speaks on Economic Outlook, Policy      
  – 6/5 Thu 1:30 PM ET: Harker Speaks on Economic Outlook
  – 6/5 Thu 1:30 PM ET: Schmid Speaks on Banking Policy           

BOTTOM LINE: Still “most hated rally”

This still remains the “most hated” V-shaped stock rally. We view Bitcoin as a leading indicator and thus, we expect stocks to reattain all time highs, which Bitcoin achieved last week. We see S&P 500 reaching 6,600 by year-end.

And the drivers for this upside are:

• Still most hated rally
• Sizable perception gap: Tariff “bark worse than bite”
• Hedge funds increased short interest recently
• $7 trillion cash on sidelines
• Investment outlook better now than in Feb 2025:
  – tariff visibility
  – tax and de-regulation visibility
  – US cos survived 5^th major “stress test”
  – Fed more dovish in 2026

As for what we would buy

• Washed out stocks
• MAG7 & Bitcoin
• Industrials
• Financials: Large-cap and regional banks
• Small-caps
  

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45 SMID Granny Shot Ideas: We performed our quarterly rebalance on 5/22. Full stock list here -> Click here

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Key Incoming Data June:

• 6/2 9:45 AM ET: May F S&P Global Manufacturing PMI
• 6/2 10:00 AM ET: May ISM Manufacturing PMI
• 6/3 10:00 AM ET: Apr JOLTS Job Openings
• 6/3 10:00 AM ET: Apr F Durable Goods Orders MoM
• 6/4 9:45 AM ET: May F S&P Global Services PMI
• 6/4 10:00 AM ET: May ISM Services PMI
• 6/4 2:00 PM ET: Jan Fed Releases Beige Book
• 6/5 8:30 AM ET: 1Q F Unit Labor Costs
• 6/5 8:30 AM ET: 1Q F Nonfarm Productivity QoQ
• 6/5 8:30 AM ET: Apr Trade Balance
• 6/6 8:30 AM ET: May Non-farm Payrolls
• 6/6 9:00 AM ET: May F Manheim Used Vehicle Index
• 6/9 11:00 AM ET: May NYFed 1yr Inf Exp
• 6/10 6:00 AM ET: May Small Business Optimism Survey
• 6/11 8:30 AM ET: May Core CPI MoM
• 6/12 8:30 AM ET: May Core PPI MoM
• 6/13 10:00 AM ET: Jun P U. Mich. 1yr Inf Exp
• 6/16 8:30 AM ET: Jun Empire Manufacturing Survey
• 6/17 8:30 AM ET: May Retail Sales
• 6/17 10:00 AM ET: Jun NAHB Housing Market Index
• 6/18 9:00 AM ET: Jun M Manheim Used Vehicle Index
• 6/18 2:00 PM ET: Jun FOMC Decision
• 6/18 4:00 PM ET: Apr Net TIC Flows
• 6/20 8:30 AM ET: Jun Philly Fed Business Outlook
• 6/23 9:45 AM ET: Jun P S&P Global Services PMI
• 6/23 9:45 AM ET: Jun P S&P Global Manufacturing PMI
• 6/23 10:00 AM ET: May Existing Home Sales
• 6/24 9:00 AM ET: Apr S&P CS home price 20-City MoM
• 6/24 10:00 AM ET: Jun Conference Board Consumer Confidence
• 6/24 10:00 AM ET: Jun Richmond Fed Manufacturing Survey
• 6/25 10:00 AM ET: May New Home Sales
• 6/26 8:30 AM ET: May P Durable Goods Orders MoM
• 6/26 8:30 AM ET: May Chicago Fed Nat Activity Index
• 6/26 8:30 AM ET: 1Q T GDP QoQ
• 6/26 11:00 AM ET: Jun Kansas City Fed Manufacturing Survey
• 6/27 8:30 AM ET: May Core PCE MoM
• 6/27 10:00 AM ET: Jun F U. Mich. 1yr Inf Exp

Key Incoming Data May:

• 5/1 9:45 AM ET: Apr F S&P Global Manufacturing PMI Tame
• 5/1 10:00 AM ET: Apr ISM Manufacturing PMI Tame
• 5/2 8:30 AM ET: Apr Non-Farm Payrolls Tame
• 5/2 10:00 AM ET: Mar F Durable Goods Orders MoM Tame
• 5/5 9:45 AM ET: Apr F S&P Global Services PMI Tame
• 5/5 10:00 AM ET: Apr ISM Services PMI Tame
• 5/6 8:30 AM ET: Mar Trade Balance Tame
• 5/7 9:00 AM ET: Apr F Manheim Used Vehicle Index Hot
• 5/7 2:00 PM ET: May FOMC Decision Mixed
• 5/8 8:30 AM ET: 1Q P Unit Labor Costs Tame
• 5/8 8:30 AM ET: 1Q P Non-Farm Productivity QoQ Tame
• 5/8 11:00 AM ET: Apr NY Fed 1yr Inf Exp Mixed
• 5/13 6:00 AM ET: Apr Small Business Optimism Survey Tame
• 5/13 8:30 AM ET: Apr Core CPI MoM Tame
• 5/15 8:30 AM ET: May Philly Fed Business Outlook Tame
• 5/15 8:30 AM ET: Apr Core PPI MoM Tame
• 5/15 8:30 AM ET: May Empire Manufacturing Survey Tame
• 5/15 8:30 AM ET: Apr Retail Sales Tame
• 5/15 10:00 AM ET: May NAHB Housing Market Index Tame
• 5/16 10:00 AM ET: May P U. Mich. Sentiment and Inflation Expectation Hot
• 5/16 4:00 PM ET: Mar Net TIC Flows Tame
• 5/19 9:00 AM ET: May M Manheim Used Vehicle Index Tame
• 5/22 8:30 AM ET: Apr Chicago Fed Nat Activity Index Tame
• 5/22 9:45 AM ET: May P S&P Global Services PMI Tame
• 5/22 9:45 AM ET: May P S&P Global Manufacturing PMI Tame
• 5/22 10:00 AM ET: Apr Existing Home Sales Tame
• 5/22 11:00 AM ET: May Kansas City Fed Manufacturing Survey Tame
• 5/23 10:00 AM ET: Apr New Home Sales Tame
• 5/27 8:30 AM ET: Apr P Durable Goods Orders MoM Tame
• 5/27 9:00 AM ET: Mar S&P CoreLogic CS home price Tame
• 5/27 10:00 AM ET: May Conference Board Consumer Confidence Tame
• 5/27 10:30 AM ET: May Dallas Fed Manuf. Activity Survey Tame
• 5/28 10:00 AM ET: May Richmond Fed Manufacturing Survey Tame
• 5/28 2:00 PM ET: May FOMC Meeting Minutes Mixed
• 5/29 8:30 AM ET: 1Q S GDP QoQ Tame
• 5/30 8:30 AM ET: Apr Core PCE Deflator MoM Tame
• 5/30 10:00 AM ET: May F U. Mich. Sentiment and Inflation Expectation Mixed

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023: