Today, we are lowering our subjective odds of a recession from 45% to 35% following last week’s news that China and the US might be moving toward starting trade negotiations. We also remain impressed with the resilience of the US economy following Friday’s . However, we are not raising our 6000 year-end target for the .
Our QuickTakes dated April 24 was titled “Strongest Buy Signal Ever?” We reiterated that “[w]e still believe that the latest correction in the S&P 500 bottomed on April 8, a day before Trump basically postponed ’Liberation Day.’” A week ago in MARKET CALL, we briefly mentioned that a bullish Zweig Breadth Thrust might be in play.
On Friday, the S&P 500 notched its first nine-day winning streak since November 2004 (chart). While the index had many seven- and eight-day streaks in recent years, the nine-day consecutive winning streak had proved elusive for the past two decades—until Friday.
The S&P 500 now exceeds its close on Liberation Day, just before Trump announced his reciprocal tariffs on the world after the close. It also exceeds its 50-day moving average and is only 7.4% below its record high. It’s an 18.9% correction that lasted from February 19 to April 8.
The also rose above its 50-day moving average last week and is only 10.9% below its record high (chart). It’s a 24.3% bear market that lasted from December 16, 2024, through April 8, 2025.
On a year-to-date basis, the S&P 500 is down only 3.3%, with down 11.7% and up 0.9% (chart).
The S&P 500’s correction wasn’t solely about Trump’s tariffs. Investors questioned whether the Magnificent-7 and other technology companies were spending too much on AI infrastructure, especially after DeepSeek was introduced on January 24. The S&P 500 Data Center REIT took a deep-six dive, but has rebounded since April 8 (chart).