In this episode:

• Equity markets have posted an impressive rebound, driven by the temporary easing of U.S.-China tariffs, strategic agreements signed by Trump in the Middle East, and strong technical positioning, with buying flows from systematic funds and retail investors.
• The market is pricing in a highly optimistic scenario, with volatility at its lowest levels and compressed credit spreads. However, signs of weakness persist, such as still-elevated tariffs, slowing signals from hard data, and Moody’s downgrade of the U.S. from its AAA credit rating.
• High valuations and renewed bond appeal: With 30-year Treasury yields back at 5%, the comparison with the S&P 500 — trading at 22 times forward earnings — suggests a potential rotation into bonds, especially as the room for further equity gains appears to be narrowing.

Despite the apparent strength of the market recovery, the current euphoria seems driven more by political narrative than by sustainable fundamentals. With volatility at historic lows and positioning already elevated, adopting a more cautious and contrarian approach may prove wise while awaiting concrete confirmation of the agreements and the actual resilience of the economy.