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When Will The “Bear Market Rally” End and Who Has Been Buying?

Published on May 4, 2025

Jordi Visser

In this week’s video (watch video here), I explore why the current market rally—despite widespread skepticism—may not be the traditional bear market bounce that consensus believes it to be. While many investors continue to lean on recession-era analogies, both macro and market data suggest a different narrative. Jobless claims and credit spreads show no signs of stress, yet sentiment remains at historically bearish levels. This is a classic example of investors violating Bayesian principles—refusing to update their views in light of new information. Whether it’s the second derivative shift in tariff policy, the resilience of AI-related CapEx from mega-cap tech companies, or ongoing strength in the labor market, sentiment has remained stubbornly negative despite a broad-based rally.

Corporate buybacks and speculative retail flows are helping drive the S&P 500 higher across nearly all sectors. Meanwhile, the case against bonds is intensifying: inflation pressures persist, fiscal restraint remains elusive, and foreign demand for U.S. debt continues to fade—bringing back TINA (There Is No Alternative) as a tailwind for liability-driven allocators. Looking ahead, humanoid robots are approaching commercialization at scale, and Bitcoin and stablecoins are being embedded into the global financial system. Bitcoin’s ascent is increasingly institutional, and with emerging concepts like U.S.-issued “bitbonds,” the convergence of crypto and fiat infrastructure is no longer theoretical—it’s already underway.

Timestamps:

00:00–03:57 — The rally is mistrusted despite strength. Bearish sentiment remains elevated even as all sectors rise. Evidence suggests this is not a typical bear market bounce.
04:14–06:55 — No clear signs of recession. Claims and credit spreads remain stable. Sentiment is historically bearish despite price recovery, which contradicts typical patterns.
07:36–09:03 — Investors are failing to update views in Bayesian fashion. Tariff policy changes and economic data shifts aren’t being priced in.
10:00–11:28 — Recession fears are misplaced without job losses. Structural changes (e.g. gig work, contingency workers retirements, UBI) support consumption.
13:04–15:49 — AI-driven CapEx by mega-cap tech firms is distorting traditional economic measures. Revenues of top firms now rival national economies.
20:31–23:10 — Corporates (especially Apple) and retail are major buyers. Retail acts probabilistically, thriving in current trading environments.
24:06–25:05 — Bonds are unattractive without recession. The fiscal response is constrained, and foreign buyers are stepping back from U.S. debt.
26:04–27:25 — Dollar faces deglobalization and reduced demand abroad. MAG7 stocks are exposed due to their international revenue base.
27:44–28:55 — Humanoid robot adoption is accelerating. Figure AI leads with affordable, scalable models being piloted by UPS and others.
29:16–36:54 — Bitcoin adoption is surging post-ETF approval. Institutions, not retail, are the main buyers. Stablecoins are now deeply embedded in global payment rails, and the groundwork is being laid for Bitcoin to enter sovereign fiscal strategies.
Click to watch on YouTube here: Watch video here

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