Markets Happy Hour Podcast - May 23, 2025: Sun Downers and Bond Vigilantes

This week's podcast is coming to you a day late due to a typical May milestone - a high school graduation. It was fortuitous though as it enabled us to capture the latest development in tariffs, a new threat against the EU in the form of 50% tariffs, a move that send EU stocks into a late week tailspin.

Other developments include the Big Beautiful Tax Bill passing the house, and we analyze what this means for the fiscal deficit as well as the behavior of the bond market - which has continued to be "Yippy" leading to stretched bond yields.

Equity markets have been relatively flat over the course of the week, with some standouts - such as solar stocks due to the inclusion in the Big Beautiful Bill of the removal of the green-energy subsidies that have supported the renewable energy sector. These stocks fell precipitously in the last two days.

As Bitcoin passed $110,000 and the dollar reached a critical support level it was clear that there is some uneasiness in the air around the new tax bill as well as US assets. More on the concept of ABUSA (Anything But USA) next week.