Happy days are here again! The S&P 500 and Nasdaq rose to record highs today, which just happens to be tax day. What's all the excitement about? The AI bubble hasn't burst, so far. Instead, hyperscaler stocks are leading the charge since the stock market bottomed on March 30 (chart). The private credit bubble may be losing some air, but it isn't bursting, while banks are still lending. Real GDP slowed during Q4-2025 and Q1-2026, but some of that was related to bad weather. As Chauncey Gardiner correctly predicted, "There will be growth in the Spring." In any event, S&P 500 earnings rose at a faster pace during the past two quarters to fresh record highs. And investors fear missing out on peace (FOMOOP) in the Middle East.
Before the war started, we anticipated a stock market pullback because our two favorite Bull-Bear Ratios were too bullish (chart). At the end of the day on March 31, we said the market bottomed on March 30, partly because these two contrarian indicators had turned too bearish. They both rebounded over the past week, but remain relatively bearish, which is bullish, from a contrarian perspective.
