Behind the rally

141 days have passed since liberation day dip (April 8th). Fears of the effect of tariffs sank major U.S. stock indices almost 20% and since then, they have been climbing back to reach new highs. As you can see in the chart below, since 1966, only five times has the S&P500 rallied stronger than the current recovery. We’re once again at all time highs and the index has climbed 30%+ since those April lows. 1540 points up in 5 months. Interestingly, US companies have announced over $1 trillion in buybacks YTD, the fastest pace ever recorded, and margin debt is also at all time highs, a whopping $1.02 Trillion. According to Grok, the US total market cap has increased by about $10.8Tn since the April lows till today. That means 20% of the move can be explained by buybacks and margin debt. M&A activity is also picking up, reducing the number of listed companies which have been in decline for some time. How long can we stretch this move?

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