Probabilities favor "V-shaped" recovery for equities, despite murky tariff visbility. 5th confirming signal triggered 4/25

VIDEO: Friday close above 5,491 for S&P 500 is the 5th confirming signal of a low and odds favor a V-shaped recovery led by washed out stocks like $TSLA $NVDA $MSTR.

Please click below to view our Macro Minute (duration: 5:26).

The chart in this report is only accessible to members
The chart in this report is only accessible to members

The risk/reward for stocks has shifted meaningfully positive over the past week. As we noted last week, we believe probabilities favor a V-shaped recovery in equities, as we got the 5th confirming "bottom signal" on 4/25 -- the S&P 500 closed above 5,491 which is a 50% retrace of the decline from 2/18 to 4/7 (using intraday pricing). Over the weekend, the incoming developments were mostly positive, the two biggest being (i) Bessent tweeting about tariff deal progress (and reiterating White House "put") and (ii) bigbox Costco, Walmart and Target instructing Chinese suppliers to resume shipments (presumes tariff terms improve by time ships reach US shores). Thus, buying the dips regime has returned:

As we look at the week ahead, here is our framework for the week:- Bessent spent last few days tweeting progress on tariff deals- Peter Navarro has not tweeted since April 18th = good- “Blank sailings” means next focus will be empty shelves in coming weeks- but these risks seem "overstated" as $WMT $T...
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