Stock market’s ‘manic move isn’t so bullish after all,’ warns top economist

⚈ A rare nine-day S&P 500 rally may signal economic trouble, not strength. ⚈ Experts warn the U.S. may already be in or nearing recession, citing weak fundamentals and tariff volatility. ⚈ CEOs and leaders like Jamie Dimon expect a 2025 downturn amid rising U.S.-China tensions. The S&P 500 closed higher for nine consecutive days on May 2, 2025, a rare streak not seen since 2004, finishing the day up 1.4% at 5,686. Despite the rally, Rosenberg Research’s chief economist and strategist, David Rosenberg warned that the surge may signal trouble rather than strength, he said in a May 2 X post. He noted that such extended winning streaks, which have occurred only 0.25% of the time over the past century, have historically coincided with recessions or major market corrections, including the lead-up to the October 1987 crash. Rosenberg, a long-time economic bear, questioned the sustainability of current bullish sentiment, warning that the market’s manic behavior could precede a sharp reversal. “We are living through history. A 1-in-400 or 3 sigma event! Guess what? Fully 80% of the time this dynamic happened in recessionary environments, not to mention just ahead of the October 1987 crash! Maybe this “bullish” (manic) move isn’t so “bullish” after all,” he said. Impact of Trump’s tariffs He partly attributed the rally to what he called the “Trump put,” referencing a rebound following a tariff-related reprieve announced on April 9. According to Rosenberg, investor enthusiasm driven by fleeting positive news may be obscuring deeper economic vulnerabilities. Ever since the “yippy” comment back at the April 9th lows, which coincided with the 90-day reciprocal tariff “reprieve”, it is abundantly clear that there is indeed a “Trump put”. If all it takes is the word “deal”, day in and day out, to whip up this much investor exuberance,... — David Rosenberg (@EconguyRosie) May 2, 2025 As previously reported by Finbold, Rosenberg argued that the economy’s fate may already be sealed, suggesting that about 60% of it could already be in recession. He advised investors to “cleanse” their portfolios and shift toward defensive assets. Notably, Rosenberg joins several top Wall Street voices in cautioning about the economy’s trajectory. Uncertainty surrounding Trump-era tariffs and a contracting U.S. economy has fueled recession speculation, with odds rising as high as 72%. At the same time, most American CEOs now believe a downturn is likely in 2025. In this line, JPMorgan CEO Jamie Dimon has warned that escalating U.S.-China tensions could pressure S&P 500 earnings and trigger a recession. Featured image via Shutterstock Source: https://finbold.com/stock-markets-manic-move-isnt-so-bullish-after-all-warns-top-economist/