Evercore Sees Bear Market Ending, Bull Grind Begins
The S&P 500's recent 2.6% surge signals a bear-market bottom and the dawn of a new bull cyclebut Evercore ISI's Julian Emanuel warns it won't be a straight line to the moon, but rather a choppy, back-and-forth grind.
Emanuel draws parallels between today's tariff-tinged volatility and the shockwaves sent by Long-Term Capital Management's collapse in 1998. Back then, the Fed swooped in with rate cuts that propelled stocks to fresh highs almost overnight.
Today, however, inflation remains stubbornly above target, the Fed is content to sit on its hands, and policy reversalsfrom Trump's pause on tariffs on April 9 to the U.S.China dealhave only just begun to ripple through corporate supply chains. That 21.3% bear-market low feels more like a reset button than a launchpad, with headline risks still looming large.
Rather than another Goldilocks rebound, Emanuel sees the S&P 500's path as a process marked by volatility. He expects tariff levels to land around 15%17%well below Trump's initial 80% pitch but still lofty by historical standardsand to remain a source of episodic risk.
With no fast-track to dovish central-bank action and sticky inflation to keep yields elevated, each leg higher in equities may be met by profit-taking and policy anxiety. Evercore ISI's year-end target of 5,600 on the S&P 500 assumes a gradual grind upward into 2026 as markets adjust to a new normal of slower growth and policy uncertainty.
Why it matters: Investors should brace for a bull market that rewards patience and tactical shifts more than buy-and-hold faith, as intermittent headlines on inflation, tariffs or Fed policy will likely trigger swift market pivots.
This article first appeared on GuruFocus.
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41 minutes ago
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an hour ago
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Here's a look at some of the key differences between the two bills: Tax break for families The child tax credit currently stands at $2,000 per child. The House bill temporarily boosts the child tax credit to $2,500 for the 2025 through 2028 tax years, roughly the length of President Donald Trump's second term. It also indexes the credit amount for inflation beginning in 2027. The Senate bill provides a smaller, initial bump-up to $2,200, but the bump is permanent, with the credit amount indexed for inflation beginning next year. Trump campaign promises Trump promised on the campaign trail that he would seek to end income taxes on tips, overtime and Social Security benefits. Also, he would give car buyers a new tax break by allowing them to deduct the interest paid on auto loans. The House and Senate bills incorporate those promises with temporary deductions lasting from the 2025 through 2028 tax years, but with some differences. The House bill creates a deduction on tips for those working in jobs that have customarily received tips. The House also provides for a deduction for overtime that's equal to the amount of OT a worker has earned. The Senate bill comes with more restrictions. The deduction for tips is limited to $25,000 per taxpayer and the deduction for overtime is limited to $12,500 per taxpayer. The House and Senate bills both provide a deduction of up to $10,000 for interest paid on loans for vehicles made in the United States. And on Social Security, the bills don't directly touch the program. Instead, they grant a larger tax deduction for Americans age 65 and older. The House sets the deduction at $4,000. The Senate sets it at $6,000. Both chambers include income limits over which the new deductions begin to phase out. More SALT The caps on state and local tax deductions, known in Washington as the SALT cap, now stand at $10,000. The House bill, in a bid to win over Republicans from New York, California and New Jersey, lifts the cap to $40,000 per household with incomes of less than $500,000. The credit phases down for households earning more than $500,000. The Senate bill keeps the cap at $10,000. That's a non-starter in the House, but Republicans in the two chambers will look to negotiate a final number over the coming weeks that both sides can accept. Medicaid providers The House bill prohibits states from establishing new provider taxes or increasing existing taxes. These are taxes that Medicaid providers, such as hospitals, pay to help states finance their share of Medicaid costs. In turn, the taxes allow states to receive increased federal matching funds while generally holding providers harmless through higher reimbursements that offset the taxes paid. Such taxes now are effectively capped at 6%. The Senate looks to gradually lower that threshold for states that have expanded their Medicaid populations under the Affordable Care Act, or 'Obamacare,' until it reaches 3.5% in 2031, with exceptions for nursing homes and intermediate care facilities. Industry groups have warned that limiting the ability of states to tax providers may lead to some states making significant cuts to their Medicaid programs as they make up for the lost revenue in other ways. The Medicaid provision could be a flashpoint in the coming House and Senate negotiations. Sen. Josh Hawley, R-Mo., was highly critical of the proposed Senate changes. 'This needs a lot of work. It's really concerning and I'm really surprised by it,' he said. 'Rural hospitals are going to be in bad shape.' Tax breaks for business The House bill would allow companies for five years to fully deduct equipment purchases and domestic research and development expenses. The Senate bill includes no sunset, making the tax breaks permanent, which was a key priority of powerful trade groups such as the U.S. Chamber of Commerce. Clean energy tax credits Republicans in both chambers are looking to scale back the clean energy tax credits enacted through then-President Joe Biden's climate law. It aimed to boost the nation's transition away from planet-warming greenhouse gas emissions toward renewable energy such as wind and solar power. Under the Senate bill, the tax credits for clean energy and home energy efficiency would still be phased out, but less quickly than under the House bill. Still, advocacy groups fear that the final measure will threaten hundreds of thousands of jobs and drive up household energy costs. Odds and ends The House bill would allow millions of Americans to use their health savings accounts to pay for gym memberships, with a cap of $500 for single taxpayers and $1,000 for joint filers. The Senate bill doesn't include such a provision. The House reinstates a charitable deduction for non-itemizers of $150 per taxpayer. The Senate bill increases that deduction for donations to $1,000 per taxpayer. Republicans in the House bill included a new annual fee of $250 for EV owners and $100 for hybrid owners that would be collected by state motor vehicle departments. The Senate bill excludes the proposed fees.
