Economist Called Bull Market, Now Issues Dire Warning For Economy, Markets | Sam Burns

Summary

Sam Burns of Mill Street Research says the rapid equity rebound reflects resilient tech/AI earnings and less severe tariff policy than feared, but he warns the U.S. economy is losing momentum because fiscal, trade and immigration policy has turned into a headwind. He recommends a barbell of large-cap tech and communication services balanced with utilities and real estate, plus high-grade fixed income and TIPS, while avoiding tariff-hit energy, commodities and consumer sectors. He sees S&P 500 consolidation as the base case, expects Fed cuts if labor weakens, and says large-cap US equities, especially leading tech, are likely the best major asset class for the rest of 2025.

• Sam Burns says the market bounced back from the tariff sell-off faster than historical declines.
• He warns US growth is slowing due to tariffs, immigration, healthcare and trade policy; labor market is no-hire, no-fire and consumer spending was flat in H1.
• He recommends a barbell: large-cap tech and communication services plus utilities or real estate hedges.
• He favors high-grade fixed income and TIPS, and advises against reaching for high-yield credit.
• He expects S&P 500 consolidation around 6,300-6,500 by year-end, with a pullback more likely than a big rally.
• He sees the Fed likely staying on hold longer, with possible September and December cuts if labor weakens.
• He warns tariffs may keep inflation sticky and durable goods prices higher.
• He says large-cap US equities, especially leading tech, are the best major asset class for the rest of 2025; overseas equities face tariff headwinds, gold may consolidate, and industrial metals are weak.