Stephanie Pomboy: "We're Not Out Of The Woods", This Is A Rally To Be Sold

**SPEAKER_1** (0:01)
Summer's here, and Nordstrom has everything you need for your best dressed season ever. From beach days and weddings, to weekend getaways in your everyday wardrobe, discover stylish options under $100 from tons of your favorite brands like Mango, Skims, Princess Polly, and Madewell. It's easy too, with free shipping and free returns, in-store order pickup and more. Shop today in stores online at nordstrom.com or download the Nordstrom app.

**SPEAKER_2** (0:30)
With a Venmo debit card, you can Venmo more than just your friends.

**SPEAKER_3** (0:33)
You can use your balance in so many ways.

**SPEAKER_2** (0:35)
You can Venmo everything.

**Stephanie Pomboy** (0:36)
Need gas?

**Adam Taggart** (0:37)
You can Venmo this.

**Stephanie Pomboy** (0:38)
How about snacks?

**Adam Taggart** (0:39)
You can Venmo that.

**SPEAKER_3** (0:41)
Your favorite band's merch?

**Adam Taggart** (0:42)
You can Venmo this.

**SPEAKER_3** (0:43)
Or their next show? You can Venmo that. Visit venmo.me slash debit to learn more.

**SPEAKER_6** (0:53)
The Venmo MasterCard is issued by the Bancorp Bank and a pursuant to license by MasterCard International, Incorporated Card may be used everywhere MasterCard is accepted.

**Adam Taggart** (0:58)
Venmo purchase restrictions apply.

**Stephanie Pomboy** (1:01)
I still think we're not out of the woods, and to the extent I foolishly continue to imagine that the fundamentals should have some dictate in the direction of asset prices, I think that this is probably a rally to be sold.

**Adam Taggart** (1:26)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Welcoming you back here with another bi-weekly catch up with our great friend of the show, Stephanie Pomboy. Stephanie, how are you doing today?

**Stephanie Pomboy** (1:38)
I'm great, Adam. Thank you so much for having me. It's always fun to be with you, and every week feels like we're starting a whole new era, doesn't it?

**Adam Taggart** (1:48)
No, I mean, the old Lenin quote about, there are decades where not much happens, and then there are years where decades worth of activity happens. I mean, it seems like we've compressed that into a daily basis now where there are days where years worth of activity happens. So yeah, going two weeks in between these things, it feels like we're going dog years in between.

**Stephanie Pomboy** (2:11)
I mean, we're just jumping over so much stuff because there's so many news stories that hit in that time, but then they fade away and they're replaced with new stories. So it's probably just as good that we're not wasting a lot of time and energy keeping on top of every single story because they disappear as quickly as they emerge, it feels like.

**Adam Taggart** (2:32)
Right. It's crazy because these are big stories. I don't even know. Are we going to talk at all about the Elon Trump meltdown? Are we going to talk about the big beautiful bill? Are we going to talk about the LA riots? Are we going to talk about some of these trade deals that are trying to get struck? I mean, there's just so many big things going on right now. But let's start with a question I've been asking a lot of folks recently is, was the correction that we saw in March and April, was that, and then the recovery that we saw in May, was the May recovery just a sneaky bear market rally that's trying to suck everybody back into the markets and then pull out the rug from beneath them? Or was the March-April decline just a correction in an otherwise still intact bull uptrend?
And the past couple of weeks, I think people have argued both sides of it. Increasingly, I'm hearing, I don't think it was a bear market rally. I think we're going to new highs from here, et cetera. And there definitely seems to be a growing optimism on Wall Street for sure, that the bullet has been dodged and we're back on the train to just an extra bull, higher and higher asset prices from here. So Steph, were recession fears overblown? Did we avoid the recession?

**Stephanie Pomboy** (3:52)
Well, this is the softball pitch down the middle for me, Adam. Thank you for throwing me an easy one. Well, to the extent that I thought all along that the consumer was in recession before Trump took office and before the whole tariff tantrum and the big sell-off in April and the rebound in May. So pretty much my answer is I still think we're not out of the woods and to the extent I foolishly continue to imagine that the fundamentals should have some dictate in the direction of asset prices. I think that this is probably a rally to be sold. That said, I don't know that I wouldn't be running in right now and shorting it like crazy because as you and I briefly talked about before we jumped on this, some of the technical things look like you could see this move a little higher before you get one last blast off and then things revert back to earth. But I'm not a trader. So I prefer, as you know, to look at the big picture and step back and just broadly speaking, fundamentally, nothing has changed. We started the year without any tariffs. We went through this tariff tantrum. And now, you know, we're trying to figure out what the new playing field is. We'll emerge from it with some level of tariffs on some of our trade partners, if not all of them. So at a minimum, that's going to be a headwind for either corporate profits or the consumer, should corporations be able to pass those price increases along, which as you and I've talked about prior, I'm highly skeptical about. I think it's more of a profit margin story. But so there's that headwind. But the biggest headwind of all is just interest rates. We've seen, as you noted, this risk on fervor in the markets, where the stock market's gone back up, done a nice U-turn, the VIX has collapsed, and credit spreads have narrowed dramatically. But the 10-year yield has done nothing. It's just pretty much just moved in a sideways line for the last several months in the face of stronger growth, weaker growth, you name it. It doesn't seem to matter. We have this kind of, I hate to use the phrase, a new normal when it comes to treasury yields.