The Dividend Cafe Not Going Away in May
Jun 2, 2025
The discussion kicks off with a surprise recovery in the stock market amidst tariff fears, alongside a dramatic drone attack in Ukraine. Key insights include the thriving Broadway scene despite economic struggles faced by U.S. manufacturers. The conversation touches on the real estate market's challenges and the potential impacts of Federal rate cuts. Lastly, there's talk about Master Limited Partnerships and creative advice for new graduates, fostering a thoughtful look at national debt and economic growth.
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Markets Discount Trade War Risks
- The market reversed a sharp early drop without a specific new catalyst, indicating disbelief in escalated tariff threats.
- The 'sell in May and go away' strategy failed as May was the best in 35 years, showing markets price out extreme trade war risks.
Tight Credit Spreads Signal Optimism
- Credit spreads, including between investment grade and junk bonds, are very tight indicating optimism about the economy.
- This credit market strength signals a low probability of recession currently.
Tariff Legal Rulings Have Limited Impact
- The Court of International Trade ruled most tariffs under the Emergency Economic Powers Act as illegal, but many remain under appeal or justified differently.
- Legal rulings may not matter as much as eventual trade deals and political negotiation outcomes.