S&P 7000 & The Vibecession: Why "Good Data" Feels So Bad
The Familiar Echo of 2022–2024
Does this sound familiar? The stock market is carving out new highs, economic data looks “okay” on paper, and employment numbers remain steady. Yet there’s a massive disconnect. Those in charge of the economy are sounding optimistic, claiming everything is good, a sentiment we heard repeatedly between 2022 and 2024.
Even though the top-line economy looks stable, many Americans are simply not feeling it. During the Biden years, the term “Vibecession” was coined to describe this exact phenomenon: top-line data looks good, even great, but the consumer experience is one of anxiety. Today, we’ve returned to that familiar place. Affordability, inflation, and employment remain central concerns, and gas prices in particular serve as a daily reminder of the true cost of living. It begs the question: how long can the top 10% of income earners keep this economy afloat?
Animal Spirits vs. Economic Reality
The stock market has proven resilient, rebounding from the initial sell-off at the start of the Iran war. With the S&P 500 closing above 7000, animal spirits and FOMO (Fear Of Missing Out) are once again coloring investment strategies.
Analysts are expecting earnings growth of 17%, and stock prices are already aggressively reflecting those expectations. However, the background data can be interpreted two ways:
The Bull Case: The U.S. economy continues to hum along despite geopolitical shocks.
The Bear Case: Interest rates spiked after the war began and have not looked back. Mortgage rates have followed suit, putting a significant damper on the housing market while inflation continues to tick upward. As discussed in Markets, War, and Economic Uncertainty and Conflict, Shocks, and Continued Uncertainty, the broader backdrop remains fragile even when headline market levels look strong.
Note to Investors: Those who panicked at the start of the war and tried to time the market have already lost out on this recent rebound. Markets move faster than headlines.
Navigating the Forest of Anxiety
Going forward, uncertainty is the only certainty. If the conflict in Iran continues beyond the 60-day mark and requires Congressional approval for increased funding, the political fallout could trigger another round of market volatility.
Our strategy remains unchanged: we stick to the plans and allocations we have built for our clients. In chaotic times, financial planning isn’t just a set of numbers. It’s a safety net. It provides the structural integrity needed to navigate through what we call the forest of anxiety. While the vibes may be off, a disciplined plan helps ensure you are not making permanent decisions based on temporary emotions.
This website is informational only and does not constitute investment advice or a solicitation. Investments and investment strategies recommended in this blog may not be suitable for all investors. SAS Financial Advisors, LLC and its members may hold positions in the securities mentioned within this newsletter. SAS Financial Advisors, LLC is not responsible for any third-party content referenced.
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