By Peter Tchir of Academy Securities

We hope you are all enjoying the Memorial Day long weekend! We could all use a nice long weekend after the past few months, which have been quite intense on the news, policy, geopolitical, and market fronts. Today is meant to honor members of the military who were killed in service. I am thankful for all that the military does, and have been incredibly lucky to be part of the growth of Academy Securities, which continues to grow our capital, increase the size and scope of the Geopolitical Intelligence Group, and, most importantly, is continuing to hire veterans.

To allow you to more fully enjoy your Memorial Day, and because, quite frankly, it is difficult to think of something new to add, we will keep today’s T-Report short and hopefully sweet.

While somewhat squeamish about Thursday’s shift to recommending Start Adding Duration, we will stick to that for now (but are closely watching foreign bond yields and the dollar, as we think we need some support there for U.S. yields to move much lower).

It was less than 2 months ago that markets were “bracing” for Main Street over Wall Street. Basically, policies that would be good for Main Street would be followed, even if they hurt Wall Street.

At the time, we argued that Main Street and Wall Street were more closely aligned than that simple message implied. There are differences, and we could certainly see (or see again) things that could hurt margins and therefore stocks, while helping people with jobs and taxes, but overall, the two are probably going to have to move in the same direction.

Wall Street seems less uncertain:

The point, I think, is that while Wall Street is less uncertain (or less concerned about uncertainty), Main Street seems VERY Uncertain.

Anecdotally, most things we are hearing fit the narrative that Main Street (call it, Corporate America of all shapes and sizes) is highly uncertain and is struggling with the uncertainty. The degree of the struggle varies, from minimal to severe (small companies dependent on China form the bulk of the latter). Make no mistake, there are pockets of the economy that are humming along. Some companies stand to benefit, even benefit greatly, from Budget 2026, deregulation, and spending linked to improving national security through national production.

But the vast majority of what we hear is uncertainty. The difficulty is figuring out when, where, or if that uncertainty will hit the economic data.

The difficulty with finding evidence that this higher uncertainty on “Main Street” will actually impact the economy stems from several issues:

We will be spending the better part of this week trying to figure out where we might identify early warning signs that Wall Street’s lack of concern is unwarranted and Main Street’s concerns will impact the data, the economy, and then markets.

Wall Street seems less concerned than Main Street, but much of the data doesn’t support the anecdotal evidence that Main Street is concerned.

That is the conundrum.

The more the administration focuses on growth, deregulation, and national production for national security, the better. Late last week, there were indications that we might be getting away from that. Minor indications, that have been assuaged by the extension, but we might all need to be thinking that while peak tariff uncertainty (danger) is behind us, we may also be past peak “dealz” optimism.

Finally, what I think is more likely is that as we digest the uncertainty going forward and the certainty of what has already been done, we should brace for a change in the economic winds again.

In no way, shape, or form do I see the current trajectory leading to Depression or even Deep Recession (unlike the pre-delay, no budget in sight policies) but that doesn’t mean markets haven’t gotten ahead of themselves (both equities and bonds).

The worst of the volatility and price action is almost certainly behind us, but that doesn’t mean the market won’t over-reach and it seems like currently there is a risk that Wall Street is ignoring Main Street’s uncertainty.

As we do some data dives this week trying to figure out what the “steady” state of the economy is likely to look like by the end of the summer (assuming we are roughly on the current policy glidepath), we will share that.

There is a chance the data dive makes us more optimistic about current market levels, but my sense is that in digging deeper, we will highlight some impacts that the market isn’t pricing in.

Enjoy the weekend and hopefully we all have an enjoyable and productive summer!