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So… What’s The Bear Case Now?
Wall Street headed into Friday's US holiday on track for another solid weekly gain. And more new rec
Consumers are levered and will be cutting, housing drives much spending and is weak, and much other consumption was pulled forward. Labor hoarding will end…
A list of points we’ll be reading ad naseum until the market reverses course. But I wonder how many stand the test of reversing your question = “So… What’s The Bull Case Now?”
The strongest answer has been expounded by McElligot as reported by you: $115 billion of them. The rest is of little consequence.
This kind of “says it all” on stretched finances. However, so far at least, it doesn’t seem to matter.
https://www.forbes.com/sites/jackkelly/2025/04/16/the-buy-now-pay-later-boom-at-coachella-signs-of-stretched-wallets/
Been reading about the risks from BNPL for over 18 months now…probably still comes down to employment holding up or not, and then near term tariff effects on consumption…though I’ve never seen nor remembered such a consistently pronounced narrative that the wealthiest top 10% are currently responsible for 50% of consumption…lots of spinning plates…
From what I have read, for BNPL, the late fees and interest rates on payments in default are 5% and 36%, respectively. Ouch.
It might be worth mentioning the slurping sound of an eminent TGA refill sucking liquidity like Daniel Day Lewis drinking a milkshake.
I think market is “good to go” for the summer.
– Tariff TACO Time
– Rate cut hopes for Sept
– 2Q earnings, revisions no better/worse than 1Q
– BBB done
– AI capex not slowing
– Vol CTA buying
– Discretionary forced/lured back in
Meanwhile
– Tariff collection rises 2X to announced rates, tariff uncertainty never ends
– Employment rolls over
– 2025 and 2026 estimates keep going down
– Housing slump breaks down prices
– Consumer rolls over
When to lean defensive again? Well, I’m always superstitious about Sep/Oct.
John L.’s list is a good list for both sides of the argument. One could argue the bullish side of the boat will get a bit heavy if the $115 billion buy from CTA happens. Given that a lot of folks are looking to the end of Q3/Q4 as a potential period of disruption (as if that has not already occurred…), it probably happens at some other point in time. Risk management, allocation and position sizing important now, since timing is a mug’s game. Hope everyone enjoys the holiday and make sure you finish with the same number of fingers you started the day with!