To hell and back again.

That’s one way to describe the last three or so months in the global macrosphere.

Not long ago — where that means late last month — some manner of global recession seemed quite likely, and in some respects still does. At the same time, the Trump administration was barreling towards some sort of Constitutional crisis at home, and in some respects still is.

I doubt seriously the idea that America and the world are going to escape from the first 100 fraught days of Trump’s second term unscathed, but recent events suggest the worst-case is no longer the base-case. And that’s not nothin,’ as they say.

In a note published Monday, Deutsche Bank said the global growth outlook’s improving thanks to a trio of “material economic developments so far in May.” The first is simply that US trade policy’s suddenly less adversarial. There’s “a better defined range of tariff outcomes [and] the peak of the trade war uncertainty is in,” as George Saravelos put it.

I’m not sure I’d go that far, but the uncertainty levels witnessed in April certainly set a high bar, so Saravelos’s suggestion isn’t unreasonable. But as BMO’s Ian Lyngen noted, the 90-day “pause” on US-China tariffs is itself a source of ambiguity. “One concerning takeaway from the development is that the window of uncertainty has been increased by 90 days,” he remarked.

In any event, Deutsche Bank went on to say the “stage is being set for an easing in the global fiscal stance” with Germany, Canada, Australia, Japan and Sweden all set to embark on expansionary fiscal policies, “while China is front-loading fiscal stimulus.”

Finally, the bank said, oil prices have fallen materially which “represents a de facto fiscal easing” to oil importers.

The result is a materially better global growth view, at least from where Deutsche’s sitting. And they’re not alone. Nomura on Monday said consensus macro bearishness was “rapidly being reset” into the US-China de-escalation.

Meanwhile, earnings season in the US went well. In aggregate, anyway. As the figure on the left, below, from Goldman, shows, S&P EPS growth’s tracking 12% YoY, with results mostly in. That’s double the pre-season expected growth rate.

“The 6ppt positive earnings surprise was primarily driven by profit margins, which expanded by 111bps to 12.1% and reached the highest level since Q2 2022,” David Kostin wrote, in his latest.

The figure on the right’s instructive. Just a quarter of companies guided full-year EPS higher compared to 41% on average over the past 18 years. That’s a function of uncertainty, Kostin said, adding that the same uncertainty likely “explains why investors have not rewarded strong earnings results.”

So I suppose a lifting of uncertainty should result in a re-rating for companies who beat estimates. But again, it’s important not to lose sight of the fact that Trump is proudly (avowedly) an agent of chaos. As Scott Bessent put it last week, “President Trump creates what I would call strategic uncertainty in the negotiations.”