{"id":83043,"date":"2025-07-22T11:24:12","date_gmt":"2025-07-22T11:24:12","guid":{"rendered":"https:\/\/www.europesays.com\/us\/83043\/"},"modified":"2025-07-22T11:24:12","modified_gmt":"2025-07-22T11:24:12","slug":"goldilocks-is-ignoring-the-three-bears-wall-street-says","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/83043\/","title":{"rendered":"\u2018Goldilocks\u2019 is ignoring the three bears, Wall Street says"},"content":{"rendered":"<ul>\n<li><strong>Markets are mostly maintaining their all-time highs<\/strong> despite Trump\u2019s tariffs, threats to Fed independence, and analysts reducing their expectations for U.S. GDP growth. Investors are instead enjoying a \u201cGoldilocks scenario,\u201d Goldman Sachs says. <a href=\"https:\/\/fortune.com\/company\/barclays\/\" target=\"_blank\" aria-label=\"Go to https:\/\/fortune.com\/company\/barclays\/\" class=\"sc-19cc8fd2-0 iHosVH\" rel=\"noopener\">Barclays<\/a> agrees: \u201cAnother week, another tariff salvo, and another market shrug.\u201d<\/li>\n<\/ul>\n<p>S&amp;P 500 futures are barely moving this morning after the index itself hit an all-time high yesterday, poking its head above 6,300 for the first time ever and closing at 6,305.6.<\/p>\n<p>In Asia and Europe, there was a small amount of profit-taking earlier today but nothing to be concerned about\u2014equities remain mostly near their record peaks globally.<\/p>\n<p>There is no excuse for this behavior, arguably. There are three bearish indicators that ought to be scaring investors right now: The U.S. is imposing a trade tax on the entire planet; President Trump has threatened the independence of the Federal Reserve; and Goldman Sachs just moved down its forecast for U.S. GDP in the second half of the year (to 1.1%).\u00a0<\/p>\n<p>But, as Goldman\u2019s Christian Mueller-Glissmann told clients in a recent note seen by Fortune, the markets appear to be ignoring this and enjoying a \u201cGoldilocks scenario\u201d instead.\u00a0<\/p>\n<p>\u201cAnother week, another tariff salvo, and another market shrug,\u201d Barclays analyst Christian Keller et al. told their clients. \u201cResilient US consumer data and robust <a href=\"https:\/\/fortune.com\/company\/q2\/\" target=\"_blank\" aria-label=\"Go to https:\/\/fortune.com\/company\/q2\/\" class=\"sc-19cc8fd2-0 iHosVH\" rel=\"noopener\">Q2<\/a> earnings for now dominate over initial signs of tariff effects on CPI, continuing threats of tariff escalations and increasing political pressures on the Fed.\u201d\u00a0<\/p>\n<p>There are reasons to worry that stocks might be overpriced. Deutsche Bank\u2019s Henry Allen pointed out recently that the Fed Funds futures speculators are betting in a way that suggests they expect an upcoming recession. \u201cIf we look at Fed funds futures as of last night\u2019s close, we can see that just over 100bps of cuts are priced in over the next year to August 2026. That comes on top of 100bps already delivered between Sep-Dec 2024. So, if realised, that would be just over 200bps of cuts in two years. But historically, getting 200bps of cuts in two years has almost always required a recession,\u201d he wrote in a research note.<\/p>\n<p>Maybe. It\u2019s worth remembering that <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\" target=\"_blank\" rel=\"noopener\" aria-label=\"Go to https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\" class=\"sc-19cc8fd2-0 iHosVH\">the Fed Funds futures market<\/a> changes daily, sometimes moving quite dramatically. These investors may not literally be pricing in a recession. But they are certainly betting that Fed Chair Jerome Powell will deliver cuts to interest rates sooner or later. More cheap money is good for stocks, and that\u2019s what stocks seem to be reflecting right now.<\/p>\n<p><strong>Here\u2019s a snapshot of the action prior to the opening bell in New York:<\/strong><\/p>\n<ul>\n<li><strong>S&amp;P 500 futures<\/strong> were off 0.13% this morning after the index hit a new high, at 6,305.60, up 0.14% yesterday. The S&amp;P has never been above 6,300 before.\u00a0<\/li>\n<li>The UK\u2019s <strong>FTSE 100<\/strong> was clinging on above 9,000, at 9,008.61 in early trading.<\/li>\n<li><strong>STOXX Europe 600<\/strong> was down 0.44% in early trading.\u00a0<\/li>\n<li>Japan\u2019s <strong>Nikkei 225<\/strong> was down 0.11%.\u00a0<\/li>\n<li>China\u2019s <strong>CSI 300 Index<\/strong> was up 0.8%.\u00a0<\/li>\n<li><strong>Bitcoin<\/strong> is still above $118K.<\/li>\n<\/ul>\n<p><strong>Introducing the 2025 Fortune 500<\/strong>, the definitive ranking of the biggest companies in America.\u00a0<a href=\"https:\/\/fortune.com\/ranking\/fortune500\/?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=plea_text\" target=\"_self\" aria-label=\"Go to https:\/\/fortune.com\/ranking\/fortune500\/?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=plea_text\" class=\"sc-19cc8fd2-0 iHosVH\" rel=\"noopener\">Explore this year&#8217;s list.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Markets are mostly maintaining their all-time highs despite Trump\u2019s tariffs, threats to Fed independence, and analysts reducing their&hellip;\n","protected":false},"author":3,"featured_media":83044,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[7566,64,1597,135,42135,67,132,68],"class_list":{"0":"post-83043","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-bitcoin","9":"tag-business","10":"tag-federal-reserve","11":"tag-markets","12":"tag-new-york-stock-exchange","13":"tag-united-states","14":"tag-unitedstates","15":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114896638005480887","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/83043","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=83043"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/83043\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/83044"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=83043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=83043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=83043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}