• The stagflation narrative flips back to growth

• Earnings are eclipsing the high bar

• Inflation has peaked?

• Retail Sales jump in March (just like the Employment data)

• Employment continues to improve

• Housing is still stuck

• Business Surveys might be catching up with Business Spending

• Private credit is really private distressed equity?

• Name change / business change Hall-of-Fame candidate

• But not all 600% gains are equal

• Quick Hits

• Where did all the crypto/prediction money go?

• Chart Crime of the week

• Is this the market singing about Earnings?

We recently lamented the perils of this market environment.  War-induced stagflation, hard-to-beat Earnings expectations, private credit worries accelerating, software death-spiraling down the drain, a Fed stuck in limbo with a possible bias to hike… the market was on edge.  But perhaps our most important one-liner from mid-April was calling out the hedge funds for the sheer panic in their epic puking of stocks (more selling than during the Virus Fear).  And just like that, the markets have exerted maximum pain on the doomsdayers.  The back-and-forth in Iran is no longer the top story of the day.  Earnings have been great…even better than the lofty expectations (this coming week is the most important).  The Fed might get its new man in Kevin Warsh.  While he will not cut interest rates haphazardly, he most certainly will look at the data more objectively than outgoing Chairman Powell (not to mention, he will generally let the market dictate long-term rates).  Moreover, he has stated that he likes to observe “trimmed mean” inflation readings.  These are currently running cooler than the headline “Core” PCE.  The probability of a rate cut by December almost doubled when the DOJ announced it was dropping its investigation into Powell (this was the big hang-up for one of the Republican senators, Tom Tillis).   There had been some data showing that much of the tax savings/refunds from the Big Beautiful Bill were being used to pay down debt.  But new credit card data and Retail Sales show that the consumer is alive and well…and this includes March data during the thick of war.  The GDP nowcasts bottomed two weeks ago and have turned higher.  Even Software has bounced with the market.  While we think the sector is still troubled with AI pressures continuing, an improved macro backdrop cures a lot of short-term ills (Service Now’s shrinking margins notwithstanding).