Ball of Confusion

While driving and listening to oldies this week, the Temptations’ 1970 hit “Ball of Confusion” came on. All I could think was how fitting that song is for today! It’s always frustrating for forecasters to stare at counterbalancing indicators when trying to assess market direction. While the weight of these indicators tends to ebb and flow, we’re currently in a period where they seem to be at extremes.

One of our regular reads is the ‘Flow Show’ from Bank of America strategist Michael Hartnett. Each week, he identifies the current “zeitgeist”—the defining spirit or mood of a particular period. This week’s edition (6/6/25) highlighted the current market confusion particularly well:

  • Zeitgeist I: “Trump cuts taxes like a Republican, spends like a Democrat, DOGE was a bust, tariffs are a bust, so the only way he gets the deficit down to 3% of GDP is by max pumping GDP and hoping Bessent can sweet talk the vigilantes,” – bond bear.

  • Zeitgeist II: “It’s like the ‘80s deregulation boom and the ‘90s tech boom all at the same time,” – stock bull.

  • Zeitgeist III: “If the US is so exceptional, why does it need tariffs?” – dollar bear.

  • Zeitgeist IV: “A year ago, with all the student debt forgiveness talk, I was dreaming I might not need to save to put the kids through college. Now, with all this AI stuff, I’ll need to work longer and save more to support my jobless kids after college,” – NJ dad.

Making sense of the world these days isn’t easy—and Friday’s jobs report didn’t help matters. Although the stock market reacted positively to the BLS report showing 139,000 jobs added in May (versus the 126,000 expected), some underlying data was less encouraging. Jobs data for March and April were revised lower by a total of 95,000. May’s job gains were concentrated where they’ve been for some time: health care added 62,000 jobs, and leisure and hospitality added 48,000.

The household survey showed full-time employment declined by 623,000 in May, while part-time employment rose by 33,000. The good news: the jobs market isn’t declining rapidly. The bad news: it’s trending weaker.

The policy path is also murky, with several GOP Senators pushing back on the ‘Big Beautiful Bill’ and the Trump-Musk feud escalating.

The right time for the U.S. to address its rapidly growing debt problem has long since passed. Adding materially to the national debt is not a good option, but accelerated economic growth is necessary to bring debt back to manageable levels. It’s a fine line to walk.

Meanwhile, the odds of peace in Ukraine are growing longer.

President Trump had a ‘very good phone call’ with Chinese President Xi.

We’ll enjoy this market upswing, but we’re not inclined to chase it—because what comes next is anybody’s guess.

Have a rational week!

 

What We’re Reading

 

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All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information, and it should not be relied on as such.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

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By: Adam