Squawk on the Street SOTS 2nd Hour: Moody’s Downgrade Hits Stocks, “Jensanity”, and Trump Tax Bill Hang-ups 5/19/25
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May 19, 2025 
Tom Lee, Head of Research at Fundstrat Global Advisors, shares his optimistic take on U.S. equities despite Moody’s recent credit downgrade. Rick Santelli, CNBC’s on-air editor, delves into the implications for market dynamics and consumer confidence. They discuss Walmart’s responses to tariffs and the tension with government policy. Additionally, the spotlight shines on Nvidia’s AI advancements and the historic listing of Coinbase in the S&P 500. The conversation wraps up with updates on Trump’s tax bill and the state of political and economic challenges.
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Market Already Priced Downgrade
- Moody's downgrade was already priced into the markets, reflecting known debt issues.
- The real concern arises only if U.S. debt auctions fail, signaling serious sustainability problems.
Deregulation Trumping Tax Cuts
- Deregulation could be a larger tailwind for U.S. companies than tax cuts.
- Reducing regulatory costs, estimated at $2-$3 trillion, is crucial for boosting earnings and market multiples.
Consumer Confidence Crucial
- The consumer's confidence and spending are key to avoiding recession.
- Current inflation expectations diverge from actual inflation, offering a chance for improved consumer positivity.