Stocks are at record highs, but it doesn’t really feel like it. Blame the ‘vibe-spansion’?-amtomessage

webadmin

2025-09-13

Stocks are at record highs, but it doesn’t really feel like it. Blame the ‘vibe-spansion’?

This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:

Stocks ended this week at or near record highs. Corporate earnings are holding up — and then some. Wall Street strategists can’t raise their price targets fast enough. If you’re a company that has anything to do with an “A” and an “I,” you’re thriving. And it looks like we’re headed to a period of lower, if still nominally high, interest rates.

But it still doesn’t quite feel that way to many — arguably most — people. Are we back in a “vibecession?” Did we ever leave it?

Liz Hoffman, writing in Semafor, said the vibe may have shifted. In the Biden years, we had the “vibecession” — things in the economy were better than people felt. We’re not going to rehash that argument here.

But now, under President Trump, we may be in what she calls a “vibe-spansion.” Companies are acting like most everything’s fine, even though many metrics suggest otherwise. Businesses are bullish. Consumers are less so. The labor market is weakening, and inflation is stagnating. Yet economic actors, investors, and many in corporate America are leaning into optimism.

So, why don’t record markets feel exactly real? More and more, according to pieces of data that keep trickling out, we are seeing evidence that Trump’s “Liberation Day” tariff bonanza was a seminal event for his presidency — or at least public perception of the economy during it.

Back in November, when Trump reascended to the White House, markets were exuberant. So were the people who voted for him, many of whom cited their confidence in his stewardship of the economy. As stocks rose, so did consumer sentiment, according to the University of Michigan.

The stock market began pulling back when Trump started talking more about his tariff plans in February. That’s also when consumer sentiment began falling off a cliff, hitting a low of 52.2 in April and May — about the levels seen when inflation was at its peak in 2022.

We learned Friday that consumer sentiment is back down again, at its lowest level since the April and May doldrums.

The explanation for the “vibe-spansion” might just be a simple, if often overlooked, divide between Wall Street and Main Street. The stock market is a discounting mechanism: Stock prices reflect expectations for the future.

Tomatoes on display at a grocery store in Mount Prospect, Ill., on July 17. (AP Photo/Nam Y. Huh) · ASSOCIATED PRESS

But households live in the present. And for most people, the two main tethers to the economy are their job and their purchasing power. There are more and more signs that consumers don’t feel good about either of them.