What’s Next – “Full Bull Support”?

This is the only post-war bull market which has not yet received "Full Bull Support"! However, conditions may be emerging which could yet bring very satisfying results for those who remain bullish.

After almost a complete round trip from a 20% correction this year, it’s time to assess where things stand and what comes next.

Can the U.S. economy avoid a recession with a President who exudes chaos and with a Federal Reserve who is helplessly haunted by an inflationary ghost? Dichotomies and uncertainties are reflected everywhere. The Polymarket 2025 U.S. recession probability has oscillated from about 20% at the start of this year to a high near 65% in April and now is back to 40%. Despite a negative first quarter real GDP report, the S&P 500 stock price index has rallied back to within 3% of its all-time record high. Even though commodity prices have been flat for the last couple years, wage inflation just declined to only 3.8%, and the annual rate of consumer price inflation is only 2.3% -- its lowest level since February 2021 -- the one-year forward inflation expectation among consumers is 7.3%! Finally, although the unemployment rate is still only 4.2%, job creation is still rising, annual real GDP growth is still 2%, corporate profits are near record highs, and inflation remains low, consumer confidence is inexplicitly near an all-time record low!

Not sure I can make any more sense of the nonsense we call 2025 than can you, but what follows are a few thoughts on things and a couple guesses at how this year may yet play out.