In the first half, we examine the (rumored) literal fisticuffs in D.C., and the implications of the proposed “Big, Beautiful Bill” on taxes, spending, the deficit, interest rates, and the dollar. We discuss the timing of tax cuts versus spending cuts, especially in light of the employment data we have seen since 2022, wherein:

• Private sector job growth -> a little over 1% cumulatively.
• Public sector job growth -> over 7% cumulatively.

In the second half, we discuss the market’s rapid rebound from its April nadir and juxtapose returns (and valuations) for different parts of the equity market. Is it finally time for diversification to help after a 15-year run for the U.S.?

• U.S. large caps +3% YTD
• U.S. small caps -2% YTD
• Developed non-U.S. +17% YTD
• Emerging markets +11% YTD

While the collapse in the volatility index and the huge rally from the lows normally portend further gains, valuations for the S&P 500 are historically high on any number of measures. While the so-called Magnificent Seven are more elevated, the other 493 are also expensive, and have grown earnings a lot more slowly than the tech titans. Contrary to our forecast entering 2025, fewer than one in three stocks are outperforming this year, putting a premium on stock selection. While multiples are high, we think active managers willing to go further afield can find values.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In this episode, we have a no-holds-barred conversation featuring Kalee Kreider, a seasoned political strategist and expert in climate policy.

Together, we dig into the uncomfortable truths about markets, politics, and the economic pressures facing everyday Americans. From election forecasts and the appeal of government gridlock to the harsh realities of student debt, the conversation is unscripted, unfiltered, and unexpectedly funny.

We explore why investors often prefer a slow-moving Congress, how middle-income families are still reeling from financial burdens nobody talks about, and why economic narratives need more honesty and a lot less spin.

What You’ll Learn:

• Why political gridlock can actually calm the markets
• The ongoing impact of student debt on families earning six figures
• What’s really driving midterm election outcomes—and what to expect next
• How public perception influences both policy and portfolio performance
• Why clarity in communication is just as valuable as a solid balance sheet

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we discuss the showdown between the U.S. and China on tariffs. While the headlines have been stolen by who is calling whom first, we look into the effect the tariffs are already having on container ship volumes, and what implications that has for the rest of the supply chain, and the economy. Tariffs are just starting to hit consumers as they look to buy online, with the tariff exceeding the purchase price in some cases. While there is optimism over a resolution, historically trade agreements have involved lengthy negotiations, and we are weeks away from the initial impact of being felt, making this akin to a slow moving shipwreck. We also discuss the impact of student loan payments turning back on after years of forbearance.

In the second half, we discuss the rebound in U.S. equities, which are anticipating a quick and painless resolution to the trade war, along with three or four cuts by the Federal Reserve during the rest of this year. In our opinion, that number of cuts would only occur if we saw the onset of a recession, which has significant market implications.

• Since World War II, the average recession sees gross domestic product (GDP) decline 2.3%.
• The average earnings decline for the S&P 500 is 11% during a recession
• However, around 1/3 of the time, earnings decline 5% or less.

Many market strategists are celebrating the recent equity rebound, which has been broad based and triggered a number of positive market breadth signals. While these are normally positive portents, valuation is not part of the calculation, and any disappointment in terms of the current earnings estimates leaves little room for error, making us mindful of seeking opportunities outside of the index, which continues to be dominated by a handful of stocks.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we discuss Liberation Day, the violent reaction of, initially, the stock market and, subsequently, the bond market. In terms of the bond market, we look at the frantic trading from last week that ultimately forced the administration to announce a 90-day pause on most tariffs. Who holds U.S. debt? The answer might surprise you:

• Total debt - $34 trillion
• Domestic holders - $26 trillion
• Japan - $1.1 trillion
• China - $820 billion (though may be understated as offshore entities, i.e., other countries, are likely being used as well)
• Other countries - $5.3 trillion

In the second half, we discuss the volatile reaction of equities to headlines.

• Post-Liberation Day, over a 10% decline in two days.
• The third largest daily gain ever for the S&P 500 on April 9th (when the 90-day pause was announced).

While many pundits cite such a large up day as being a portent of further gains, which is true historically, we put it in context of valuation, and the 20.7x P/E the market currently has is well above the 12.7x multiple the market had on average after other large gains. Similarly, we look at expectations for earnings, what we have heard so far (JP Morgan noted deteriorating credit trends while Wells cited resilient spending), and what we think we might hear from companies as earnings season gets into full swing (hint: prepare for the word “uncertainty” to be a common refrain). Finally, we discuss the administration’s stated objectives of bringing back manufacturing and reducing trade deficits. What is not often mentioned is that this approach overlooks service surpluses, and is causing a sharp decline in foreign tourism, which may jeopardize these surpluses.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we discuss the imminent arrival of “Liberation Day”, and why uncertainty over tariffs is causing consternation to consumer, business, and investor confidence. We look at the most recent inflation data from the government and examine the widely divergent inflation expectations based on political affiliation. We also tie this to the likelihood of further rate cuts and the necessity to drive rates lower as sizable government debt is due to be refinanced in 2025.

In the second half, we (finally) discuss what has been a challenging quarter for stocks, especially the Magnificent Seven:

• In the aggregate, the Mag Seven are in a bear market (down 20%).
• The S&P 500 is down 5% YTD and 10% below its all-time high, led lower by the Mag Seven.
• The average stock in the NASDAQ is 35% below its high.

The path forward for the market depends on the impact of tariffs and spending cuts, both of which are likely headwinds in the near term. With both valuations and earnings expectations still elevated, there remains downside in the event of either an economic or earnings recession. However, value stocks have performed well year-to-date, as have non-U.S. stocks, which are garnering attention as a result of changing U.S. trade and foreign policy. In other words, diversification has (finally) been helping.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, Will and Adam discuss the rapid deterioration in consumer sentiment and how it is cutting across both economic and political divides, albeit to differing degrees. Some sentiment indicators, especially concerns over job loss, are at levels normally seen during a recession, in part due to the uncertainty over tariffs with large trading partners like Canada. Another concern is spending cuts. We look past the headlines to see that cuts have not yet taken hold, though with 85% of job growth in 2024 attributable to government spending, we could be in for a volatile transition period as a result of the “detox” the administration is seeking.

In the second half, we look at the recent (albeit brief) market correction, and put it in historical context:

• Since 1980, the average yearly decline for the S&P 500 has been 14%.
• There have been about 117 10% corrections since 1928, so around one per year.
• Statistically, a 10% correction turns into a bear market around 25% of the time, and that normally occurs when the economy dips into a recession. The rest of the time, the market recovers in about eight months, on average.

Although modest, the 10% correction is equivalent to 12% of GDP. That type of hit to wealth has contributed to a recession in about half of the prior 12 occurrences.

With the Magnificent Seven, on balance, lagging this year, we look at the prospect of a broader market showing the benefits of diversification, not to mention the strong start to the year for non-U.S. stocks, which have been buoyed by the shift in spending priorities in both developed and emerging markets.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

With headlines versus earnings moving markets, we look at the perceptions and realities influencing investors (and speculators).

In the first half, we discuss the sharp decline in consumer confidence and spike in inflation expectations, both of which represent challenges to continued equity market strength. We also look at how the bond market (and the Federal Reserve) are responding, and how the continued on again/off again/on again tariff headlines are causing consternation to consumers and investors.

In the second half, we delve into the perception versus reality of government efforts to cut waste and if that is enough to reduce the deficit enough to achieve the administration’s goal of a lower yield on longer term Treasuries. We also look into the effects of wealth and spending inequality on the economy. There is also a continued discussion of the effect of passive fund flows and levered ETFs on some of the markets biggest names, and how those are widening the dispersion between stock indices versus the average stock; to wit:

• The NASDAQ is only 5% from its year-to-date high, while the average NASDAQ stock is 25% from its high.
• Only 22% of stocks in the S&P 500 outperformed the index over the past 12 months.
• After six of the so-called Magnificent Seven outperformed in 2024, only one is ahead of the S&P 500 so far this year.

We close with our thoughts on where we are seeing positives and why, eventually, fundamentals may matter more than headlines.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

With tariffs in the news, we sift through the torrent of headlines coming from both sides of the border and beyond.

In the first half, we look at the breaking news on tariffs, with an 11th hour agreement with Mexico giving a pause to the proposed 25% duty on imports. We also look at why Canada may be more reticent to strike a deal, and what the bigger objectives may be. Is it all about oil and inflation, or are we looking at a 21st century version of the Monroe Doctrine aimed at China? We also break down how the Fed is assessing the situation.

In the second half, we finally get to the stock market. We look at the effect of Deep Seek news coming out of China on AI stocks, and whether it represents a opportunity or a threat for the sector. We also recap the first big week of technology earnings:

• Four of the Magnificent Seven reported.
• While the initial reaction was positive for three of the four, only one has held onto its gains.

We close with our thoughts on where we are in the economic (and market) cycle, and where we are looking for opportunities.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.