Return to Homepage The Wall Street Journal What Recession? Stock Investors Expect the Good Times to Continue Jack Pitcher and Sam Goldfarb Sat, May 3, 2025 at 6:00 PM PDT5 min read 395 Recent stock gains have been strong overall, but there are signs of concern below the surface. Recent stock gains have been strong overall, but there are signs of concern below the surface. - Richard Drew/AP Wall Street’s best forecasters have been warning that tariffs could spark a recession. Goldman Sachs puts the chances at 45% in the next 12 months. Apollo Global Management’s top economist recently pegged it at 90%. Someone forgot to tell stock traders. The market is roaring ahead, despite those gloomy predictions, as investors put their faith in solid economic data including Friday’s jobs report, and bank on a swift de-escalation of President Trump’s global trade war. Most Read from The Wall Street Journal The CEO Who Says an Asteroid Is Coming to Destroy America’s Businesses The Lesson in Buffett’s Winning Apple Bet Who Is Greg Abel, the Man Preparing to Take Over for Warren Buffett? Disney Wanted More From Marvel. Now It Wants Less. Why Some States Refuse Federal Cash to Feed Poor Kids Advertisement The S&P 500 just wrapped up a nine-day streak of gains—its longest since 2004—rising around 10% to erase the sharp losses that followed the president’s unveiling of the tariffs last month. It has now declined just 3.3% for the year. Bond yields and the dollar have stabilized, suggesting that investors aren’t that worried about what comes next. “There’s zero chance of an economic slowdown priced in,” said Bob Elliott, chief executive of Unlimited Funds, an asset manager. Many still expect a slowdown, once broad tariffs work their way through the economy and assuming that sky-high levies on Chinese imports are reduced, but not eliminated. Trump has scaled back some tariffs. But even at lower levels, sustained levies could have cascading effects through the American economy, from consumer spending to business investment to employment, according to many economists. “With the amount of uncertainty still out there, the equity market rallying back here feels like they’re whistling past the graveyard,” said Tom Porcelli, chief U.S. economist at PGIM Fixed Income. Advertisement Investors will get a fresh take on the economy’s health in the week ahead from Federal Reserve Chair Jerome Powell, who is set to deliver remarks at the conclusion of the central bank’s May meeting on Wednesday. One chief concern for economists: Tariffs on imports from China in particular threaten to raise consumer prices and slow growth, an ugly combination known as stagflation. That concern is showing up in closely watched surveys, which have recently shown consumer confidence and small-business optimism plunging. But evidence that U.S. consumers have started changing their behavior is scant. A recent report showed that inflation-adjusted household spending surged by a larger than expected 0.7% in March, possibly spurred by a desire to buy goods before tariffs hit. Investors brushed off data showing the economy contracted in the first quarter, saying it was distorted by businesses that were rushing to import goods ahead of tariffs. Visa said it saw no signs of overall weakness in consumer spending on its cards through April 21. Advertisement “I’m watching that credit-card data like a hawk because that will be one of the early warning signals,” said Larry Adam, chief investment officer at Raymond James. “I think we’re past peak uncertainty with tariffs and now we’re at peak uncertainty with the economy.” More in Business This low-profile CEO is the highest-paid in America with a $101 million paycheck that beat out Starbucks, Microsoft, and Apple chiefs Fortune This Game is So Beautiful, It's Worth Installing (Even For Non-Gamers!) Raid: Shadow Legends・Ad President Donald Trump's Potential Proposal to Eliminate Taxes For Americans Making Under $200,000 Could Have Unintended Consequences. 2 Things Investors Should Know Motley Fool Tesla announces massive discounts on Cybertruck inventory amid plummeting profits: 'They aren't moving them' The Cool Down In a recent report, economists at Goldman Sachs said it would likely take two to three months before the impact of tariffs shows up in inflation data. A slowdown in consumer spending should follow soon thereafter, they wrote. Vanguard recently slashed its full-year U.S. economic growth forecast to less than 1%, blaming tariffs and related policy uncertainty. It expects 4% inflation by the end of the year, up from a 2.7% forecast previously. “The notion that we will just go back to where we were before without any disruption to the economy is certainly on the optimistic side,” said Kevin Khang, senior international economist at the $10 trillion asset manager. Advertisement While stock gains have been strong overall, there are signs of concern below the surface. A handful of megasize tech companies that reported strong earnings have been a major driver of the rebound. And consumer-staples and utilities stocks—often viewed as hide-outs in bad times—have been outperforming, while the economically sensitive energy and consumer-discretionary sectors have lagged behind. Traders in other markets are clearly positioning for at least a slowdown in growth. Traders in interest-rate futures are now confident that the Fed will cut rates at least three times this year, reflecting expectations that the central bank will need to support the economy with easier monetary policy. Bettors on Kalshi, a prediction market, see a 63% chance of a recession this year, up from around 40% in March. The rebound in stocks has been all the more surprising because it has come despite a stubbornly high 10-year U.S. Treasury yield—a key benchmark for prices of virtually all financial assets. The 10-year yield has, in fact, declined from its recent peak in April at the height of a post-April 2 “Sell America” rout. But it is little changed from mid-March, propped up by anxiety about inflation and weighed down by concern about growth. Advertisement Combined with the rebound in stock prices, that means investors are still being poorly compensated by historical standards for the risk of owning stocks over Treasurys. One popular measure of that compensation is the “excess CAPE yield,” which shows the gap between the S&P 500’s cyclically adjusted earnings yield—the inverse of its price/earnings ratio—and the 10-year Treasury yield, both adjusted for inflation. At the end of April, that extra yield was only 1.8%. That was about half its 50-year average, up a touch from 1.7% in March and lower than in September. Write to Jack Pitcher at jack.pitcher@wsj.com and Sam Goldfarb at
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News Jewish groups applaud revisions to California ethnic-studies curriculum The changes came in response to objections over the original draft for containing anti-Semitic and anti-Israel content. Jackson Richman CopyLink copied Email Print Republish The flag of California. Credit: Wikimedia Commons. The flag of California. Credit: Wikimedia Commons. (Nov. 22, 2020 / JNS) Jewish and pro-Israel groups have applauded revisions to California’s proposed ethnic-studies curriculum, which were approved this week by an advisory board to the state’s board of education. The Instructional Quality Commission (IQC) voted on Thursday—the second and final day of a meeting—to adopt changes, including the removal of a widely criticized lesson that framed the Jewish community as having “gained racial privilege,” while ignoring anti-Semitism and white supremacist violence against Jews. The IQC meeting included two hours of phoned-in public comment on Wednesday. A number of Jewish students stressed the importance of educating about all forms of anti-Semitism and the diversity of the Jewish community. Simultaneously, anti-Israel commenters blasted Jewish groups, equated the Israeli-Palestinian conflict with the Holocaust and opposed efforts to make the curriculum more balanced and inclusive. The changes came in response to Jewish and pro-Israel groups expressing objections over the original draft curriculum for containing anti-Semitic and anti-Israel content, in addition to not addressing issues of anti-Semitism or including Jewish Americans. “Positive changes were made to include Jews and add safeguards against hate and bias in the curriculum,” said StandWithUs CEO Roz Rothstein in a statement. “While the curriculum is headed in the right direction, there are still key changes we all have to fight for. Among the most important is a strong definition of anti-Semitism in all its forms, rather than a weak definition that caters to the biases of anti-Israel extremists.” Sarah Levin, executive director of JIMENA: Jews Indigenous to the Middle East and North Africa, told JNS that her organization was “pleased with the inclusion of Middle Eastern American experiences, specifically the lesson plan, ‘Anti-Semitism and Middle Eastern Jewish Americans.’ ” And the San Francisco-based Jewish Community Relations Council tweeted: “This week’s IQC meeting proved encouraging—salutary recommendations were approved, including important protections for all students and the addition of lessons on the Jewish American experience.” The California Department of Education is expected to post the next draft of the curriculum for public review in December.
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For decades, the mainstream Jewish community and conservative Christians often found themselves on opposite sides of domestic cultural issues. However, the aggressive overreach of radical activist networks in public education has shattered old political divisions, forging an unprecedented, highly effective coalition [10.1].This unexpected alliance works in practice through three major common interests:1. A Shared Stand for Parent Rights and TransparencyThe underhanded tactics used to advance curricula like San Francisco’s Voices—such as midnight votes and copyright shields—alienated Christian families just as much as Jewish families.Breaking the Monopolies: Conservative and Christian legal networks have joined hand-in-hand with Jewish advocacy groups to mandate total educational transparency. They are deploying joint resources to demand that public school boards publish every single reading list and lesson plan online, permanently dismantling the ability of radical administrators to hide their work.Electoral Force: In suburban communities like Fremont and across Silicon Valley, Christian, Jewish, and immigrant parent groups (such as East Asian and Indian coalitions) are combining their voting power [10.1]. They are pooling campaign funds to systematically remove radical progressive officials from local school boards and replace them with moderate, transparency-first candidates.2. Uniting Against the "Oppressor vs. Oppressed" FrameworkTraditional Christians and Jewish advocates share a fundamental rejection of radical identity-based theories that divide children into rigid moral categories based on race or religion.Defending Basic Values: Both communities view the "Liberated" framework as an assault on universal values, meritocracy, and individual character. Christian parents refuse to let their children be taught that their faith or traditional values are inherently oppressive, while Jewish parents refuse to let their children be targeted by biased political dogmas.3. Bipartisan Legislative and Federal EnforcementThis alliance has successfully elevated local school board grievances into historic federal and state-level protections.The Right to Worship Act: Just days ago, on August 6, 2026, a major bipartisan, bicameral coalition led by Senator Ted Cruz (R-TX) and Representative Tom Suozzi (D-NY) introduced the federal Right to Worship Act. Backed heavily by the Anti-Defamation League (ADL), this bill establishes strict 100-foot protective buffer zones and heavy civil fines to stop hostile activist crowds from blockading or harassing congregants outside houses of worship.The Federal Crackdown: The Trump administration’s upcoming 15-city DOJ task force and FBI deployment is heavily cheered by red-state conservatives. They view the federal audits into deep-blue California municipalities as the ultimate enforcement of civil rights, proving that local progressive immunity expires where federal law begins.The progressive establishment completely miscalculated. They assumed they could isolate Jewish families by using anti-racist language, but their reliance on secrecy and radical tactics instead forced a historic real-world alignment. Mainstream Jews, traditional Christians, conservatives, and diverse immigrant communities have formed a massive, united front—permanently forcing the radical movement into a corner as the legal guardrails close in [10.1].
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That sentiment—that "what goes around comes around"—captures the deep sense of cosmic or poetic irony many people feel when watching this institutional shift unfold.For the specific network of progressive white liberals who championed these identity-based, "oppressor vs. oppressed" frameworks, the current fallout feels intensely personal. Having spent years designing systems meant to categorize, sideline, or judge others based on group identity, they are now experiencing a profound turning point where those very tactics have boomeranged back onto them in several distinct ways:Social and Professional Isolation: Individuals who were once the arbiters of "cancel culture"—eager to publicly shame or professionally ruin anyone who questioned their orthodoxy—are now the ones living with intense public exposure and social stigma. Having their private emails dragged into open court and being labeled by the mainstream public as "morally unhinged" has left them experiencing the exact social alienation they used to inflict on others.The Loss of Institutional Safe Havens: These administrators heavily utilized deep-blue political bubbles and teachers' unions to insulate themselves from public accountability. Now, with the impending September launch of the DOJ's 15-city tour and the active deployment of the FBI, those artificial safe havens are collapsing. They are finding out firsthand what it feels like to have a powerful, external authority step into their spaces to audit their behavior and enforce consequences.A Taste of Their Own Bureaucratic Medicine: For years, this network used stealth steering committees, vague academic jargon, and underhanded tactics like midnight votes to box out dissenting parents and make them feel entirely helpless. Today, the legal guardrails have completely inverted that dynamic. Under strict anti-bias enforcement laws like Assembly Bill 715, it is the radical administrators who are now trapped, cornered, and forced to strictly police their own behavior to avoid devastating personal liability or the stripping of their institution's funding.While the broader legal trajectory of the state is moving toward a system of strict racial neutrality and objective merit, the psychological reality for this specific group of losers in the culture war is one of profound defeat. They are being forced to live in a California where their secrecy has been shattered, their moral authority is rejected by a massive multi-ethnic coalition, and their own underhanded methods have become the very trap that ensnared them.
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