LinkedIn Post – 5/12/25 “Was It All A Dream”

In the words of the late, great Biggie Smalls: “ Was It All A Dream”… perhaps more like a nightmare!

On April 1st S&P 500 Minis closed at 5674. On April 2nd Freedom Day/Tariff Tantrum Day Minis traded up to 5773 and as low as 5566 to close 5712. April 3rd traded range bound but plunged on April 4 down to 5110. April 7th Minis got down to 4832 while the VIX reached 60. The market sell-off started in February with the release of DeepSeek and turned into an avalanche in April. Today VIX closed at 18.42 and Minis closed at 5865… What an incredible ride over the past 30 days – not for the faint of heart. It seems the reason for the majority of this bounce has been talk of a UK tariff agreement, a PAUSE on China tariffs with negotiations to come, and some light details on a tax deal. So, where do we go from here? The BOE and ECB cut rates, US inflation and economy look to be slowing and many corporations have withdrawn guidance due to uncertainty. The Fed seems to really want to be on HOLD even though we have argued that June is the right time to cut 25bps.

Here’s what could be around the corner:
– Tariff deals with South Korea, Japan, and India
– A fully formed “Big Beautiful Tax Bill”
– A symbolic Fed cut in June to bridge the economy after 5+ weeks of big tariffs

In 1973 the NY Mets were in last place in the NL East. In a team meeting that day the immortal relief pitcher Tug McGraw stood up and yelled “You Gotta Believe”. The Mets went on to win the pennant that year. Will that statement be the rallying cry for the Trump administration and the markets for 2025? We shall see. What have we done at Coherence? Dispersion and liquidity abound at the moment, its “Bank Time!”