Friday Charts 2025: The Market Gets It – Bulls Are in Control

Crypto markets roar back as institutional FOMO meets retail euphoria. Here’s why charts don’t lie—even when Wall Street tries to.

The TAKEAWAY

Green candles stack higher while shorts get vaporized. No fancy jargon needed—price action screams 'risk-on.'

WHY IT MATTERS

Traders who waited for 'the dip' now chase pumps. Classic.

BETWEEN THE LINES

Liquidity’s back. Derivatives open interest spikes. Even the SEC’s lawsuit backlog can’t kill this momentum.

THE PUNCHLINE

Markets move faster than regulators’ paperwork. Always have, always will—especially when bankers miss the boat (again).

It feels like the world has had a tumultuous month, but you’d never know from financial markets: BTC, gold, stocks and bonds have all been sideways.

Expectations re-coupling with reality?

The “soft” economic data (i.e., sentiment-based surveys) has rebounded back to where the “hard” data (i.e., actual economic activity) is. The hard data is trending down, but in the short-term at least, the economic impact of tariffs and policy uncertainty has not been nearly as bad as expected.

Long-term, the news is usually good:

Scott Grannis notes that the real (inflation-adjusted) net worth of US households has increased by 3.6% per year for decades. “The US economy is an astounding engine of growth and prosperity,” he concludes.

The news aside, things are unusually good right now:

Ed Yardeni characterizes the current mix of inflation and employment as a rare instance of economic “nirvana”: “The history of economic nirvanas with both inflation subdued at around 2.0% year over year and the economy at full employment (i.e., with the jobless rate at 4.0%) shows eight such transcendental experiences since the 1950s, including the current one.”

The class of 2025 is not feeling it, however:

2025 might not be the worst year ever to graduate college — but it is probably the worst relative to how good the economy otherwise is. That might be because AI is doing the entry-level jobs now. Or, as Paul Krugman believes, because political uncertainty has caused employers to stop hiring. Or something else, it’s too early to say for sure. But if you’re in school, consider staying there.

Off to a slow start:

Recent graduates are 3x more likely to be unemployed than the cohort aged between 35-44, which is probably even worse news than it sounds. Krugman notes that the consequences of early unemployment last “basically forever,” citing an NBER study that found that “those who join the workforce in a downturn have lower long-term earnings, higher rates of disability, fewer marriages, less successful spouses and fewer children.” Ugh.

You can’t see it in the data, though:

The Atlanta Fed’s GDPNow model sees Q2 growth coming in at a robust 3.4%. This makes the consensus FOMC projection of 1.4% growth for the full year seem unnecessarily gloomy. Worse yet, the FOMC’s elevated inflation forecasts make it look like they’re expecting stagflation.

Inflation “forecasting” is getting even closer to guessing:

Torsten Slok notes that almost a third of the prices going into the CPI at the moment are guesses. This seems likely to get worse, because as Jerome Powell noted this week, layoffs are making it harder for the government to collect economic data — data that’s “a real benefit to the general public” because it ensures people “have the best possible understanding of what’s happening in the economy, and hence, what’s likely to happen.” As if that wasn’t hard enough already.

There are ever more investors chasing pretty much the same number of stocks:

The US ranks second to Switzerland in average per capita wealth. It fares less well if using the median, but the number of new millionaires is impressive: Bloomberg notes that over 379,000 US residents became millionaires last year — more than 1,000 per day!

And we wonder why the market never goes down.

Have a great weekend, understanding readers.

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