In this episode, we have a no-holds-barred conversation featuring Kalee Kreider, a seasoned political strategist and expert in climate policy.

Together, we dig into the uncomfortable truths about markets, politics, and the economic pressures facing everyday Americans. From election forecasts and the appeal of government gridlock to the harsh realities of student debt, the conversation is unscripted, unfiltered, and unexpectedly funny.

We explore why investors often prefer a slow-moving Congress, how middle-income families are still reeling from financial burdens nobody talks about, and why economic narratives need more honesty and a lot less spin.

What You’ll Learn:

• Why political gridlock can actually calm the markets
• The ongoing impact of student debt on families earning six figures
• What’s really driving midterm election outcomes—and what to expect next
• How public perception influences both policy and portfolio performance
• Why clarity in communication is just as valuable as a solid balance sheet

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we discuss the showdown between the U.S. and China on tariffs. While the headlines have been stolen by who is calling whom first, we look into the effect the tariffs are already having on container ship volumes, and what implications that has for the rest of the supply chain, and the economy. Tariffs are just starting to hit consumers as they look to buy online, with the tariff exceeding the purchase price in some cases. While there is optimism over a resolution, historically trade agreements have involved lengthy negotiations, and we are weeks away from the initial impact of being felt, making this akin to a slow moving shipwreck. We also discuss the impact of student loan payments turning back on after years of forbearance.

In the second half, we discuss the rebound in U.S. equities, which are anticipating a quick and painless resolution to the trade war, along with three or four cuts by the Federal Reserve during the rest of this year. In our opinion, that number of cuts would only occur if we saw the onset of a recession, which has significant market implications.

• Since World War II, the average recession sees gross domestic product (GDP) decline 2.3%.
• The average earnings decline for the S&P 500 is 11% during a recession
• However, around 1/3 of the time, earnings decline 5% or less.

Many market strategists are celebrating the recent equity rebound, which has been broad based and triggered a number of positive market breadth signals. While these are normally positive portents, valuation is not part of the calculation, and any disappointment in terms of the current earnings estimates leaves little room for error, making us mindful of seeking opportunities outside of the index, which continues to be dominated by a handful of stocks.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.

In the first half, we discuss Liberation Day, the violent reaction of, initially, the stock market and, subsequently, the bond market. In terms of the bond market, we look at the frantic trading from last week that ultimately forced the administration to announce a 90-day pause on most tariffs. Who holds U.S. debt? The answer might surprise you:

• Total debt - $34 trillion
• Domestic holders - $26 trillion
• Japan - $1.1 trillion
• China - $820 billion (though may be understated as offshore entities, i.e., other countries, are likely being used as well)
• Other countries - $5.3 trillion

In the second half, we discuss the volatile reaction of equities to headlines.

• Post-Liberation Day, over a 10% decline in two days.
• The third largest daily gain ever for the S&P 500 on April 9th (when the 90-day pause was announced).

While many pundits cite such a large up day as being a portent of further gains, which is true historically, we put it in context of valuation, and the 20.7x P/E the market currently has is well above the 12.7x multiple the market had on average after other large gains. Similarly, we look at expectations for earnings, what we have heard so far (JP Morgan noted deteriorating credit trends while Wells cited resilient spending), and what we think we might hear from companies as earnings season gets into full swing (hint: prepare for the word “uncertainty” to be a common refrain). Finally, we discuss the administration’s stated objectives of bringing back manufacturing and reducing trade deficits. What is not often mentioned is that this approach overlooks service surpluses, and is causing a sharp decline in foreign tourism, which may jeopardize these surpluses.

Learn more about Formidable Asset Management, Will Brown, and Adam Eagleston by visiting www.formidableam.com.