Expert: Brace For Another 20% Market Crash And Recession This Summer

The Trump Rally Has Come To An End, Says Peter Berezin

May 02, 2025

MARKET RECAP

Latest News. Market volatility eased significantly this week (April 21–25), with the VIX dropping to 24.84 on Friday, down from a 35.75 high at the start of the week, as optimism grew around US-China trade negotiations and major tech earnings outperformed expectations.

The S&P 500 rebounded from an early-week selloff, ending up 5.59% for the week. The Nasdaq surged 6.7%, while the Dow Jones lagged but still gained 2.5%. The rally was fueled by strong results from Alphabet, Tesla, Nvidia, and Meta Platforms, with Tesla (despite a lackluster report) also jumping almost 24% and Alphabet up 1.5%.

The 10-year Treasury yield drifted lower, closing at 4.32% on April 24, compared to 4.42% at the week’s open, as traders increasingly expected Fed rate cuts.

Despite the improving sentiment, the S&P 500 remains down 1.5% for the month, and the Dow is off 4.5% since April began. President Trump’s softer tone on tariffs helped reverse earlier losses, but markets remain sensitive to trade headlines and global economic signals.

BCA Research's Chief Global Strategist Peter Berezin said that Treasury Secretary Scott Bessent's claims of imminent trade deal progress appeared unlikely, explaining that China had little incentive to negotiate.

“The reality is that China doesn’t have any major incentive to make a deal with the U.S.,” he said. “Chinese exports to the U.S. are like 2 percent of GDP… They can certainly offset that drag with stimulus if they so choose.”

Regarding US economic indicators, Berezin predicted a recession beginning by summer 2025, citing declining job openings, rising delinquency rates, and excess housing inventory.

“We’re going to see a much more difficult labor market in the second quarter, and into the third quarter of this year,” he said. “And most likely a recession that starts by the summer.”

He explained the pattern of rising bond yields alongside a weakening dollar suggested changing investor sentiment toward the dollar.

"The fact that the dollar is weakening now is telling you something important," Berezin said. He explained, "Investors increasingly do not see the dollar as a safe haven asset."

Berezin maintained his S&P 500 year-end target of 4450, predicting a 10% earnings decline. For investors, he said underweighting stocks, holding cash, and favoring defensive sectors was advisable. He explained gold appeared promising while Bitcoin warranted caution due to its market characteristics.

Market Movements

From April 21-25, the following assets experienced dramatic swings in price. Data are up-to-date as of April 25^th at 4pm EST (approximately).

Tesla ($TSLA) – up 23.75%
Equifax ($EFX) – up 17.71%
First Solar ($FSLR) – up 12.18%
Globant ($GLOB) – up 14.05%
Verizon ($VZ) – down 5.18%

DXY – up 0.39%

Bitcoin – up 11.25%

Gold – down 3.06%

10-year Treasury Yield – down 1.55%

S&P 500 – up 5.59%

Russell 2000 – up 3.85%

USD/Yuan – down 0.21%

CRYPTO: Global ‘Chaos’, Monetary Collapse To Send Bitcoin To $10 Million

Michael Saylor, Executive Chairman of Strategy (formerly MicroStrategy), said The White House crypto summit was a significant moment, noting the president's signing of the Strategic Bitcoin Reserve and the Treasury Department's reversal of anti-crypto banking guidelines.

"The administration is moving faster with innovative programs and decisive, courageous, pro-business, pro-technology, pro-innovation programs than any administration in my lifetime," Saylor said.

On Bitcoin's investment thesis, Saylor said short-term trading strategies were less effective than long-term holding.

"Bitcoin is going to grind up 30 to 60% a year for the next 20 years," he predicted.

Saylor explained Bitcoin's appeal during market uncertainty: "Bitcoin is powered by chaos because chaos will never go away. It's always going to devalue traditional physical and financial capital assets."

Regarding the company's name change from MicroStrategy to Strategy, Saylor said simplicity and recognizability were important. "The design is not complete until there is nothing left to take away," he explained.

Saylor said the United States was positioned to lead global Bitcoin adoption, potentially triggering what he called "a Cambrian explosion in innovation and digital transformation."

ECONOMY: Will Tariffs Trigger Banking Collapse? Banks' Top Risks Exposed

Christopher Whalen, chairman of Whalen Global Advisors, said recent market volatility was a buying opportunity rather than a crisis, explaining "my message to my flock is everyone calm down. Do your homework. Think about what you wanted to buy last year that was too expensive," noting he had recently purchased American Express shares on price dips.

Regarding Trump's trade policies, Whalen explained, "Trump is trying to wind the clock back 75 years and have fair trade." He said the administration would eventually make deals with allies while maintaining sanctions on China and Russia.

On inflation, Whalen predicted it would remain elevated despite some relief in energy prices. He explained that the Federal Reserve faced conflicting economic signals, with Powell acknowledging that tariffs would cause "higher inflation and slower growth."

Whalen said banks had "way too much capital" to face serious problems, with current pain concentrated in commercial real estate rather than consumer loans. "If you compare the pain for banks today, it's on the commercial side, not the consumer side," he said.

For investors seeking safety, Whalen said gold was advisable, which he predicted would continue rising due to limited supply and increased central bank buying. He explained fears of economic collapse were unfounded but said "the whole architecture that came out of World War II has got to be revised."

MARKETS: Recession Around The World: Market Correction Of ‘Cyclical Degree’ Not Over

Felix Zulauf, founder of Zulauf Consulting, predicted in December 2024 that policy uncertainty would create market volatility in early 2025, which had materialized with Trump's tariff policies.

“All the bad stuff that I have been expecting late last year is really now in the price at the lows of April 7,” Zulauf said, referring to the recent market correction of approximately 20%.

Zulauf said the world economy faced a recession due to policy uncertainty, reduced government spending, and weakening consumer confidence. He explained structural changes in global finance, particularly concerning the U.S. dollar's status.

"The U.S. dollar has lost its status that it once had as the major reserve currency," Zulauf explained, pointing to foreign investors selling U.S. assets and seeking alternatives like gold.

For investors, Zulauf said there were limited safe havens in the current environment. He predicted gold would reach a "buying climax" before a significant correction, and explained long-term bonds were "much more risky than the stock market."

Looking beyond 2025, Zulauf predicted recovery through fiscal stimulus, monetary easing, and higher inflation, with the S&P 500 potentially reaching 7,500 by 2027.

MARKETS: People Don’t Realize ‘How Bad This Could Get’; Gold To $7,000 In Dollar Crisis

Luke Groman, Founder & President of Forest for the Trees, and James Thorne, Chief Market Strategist at Wellington-Altus Private Wealth, discussed market shifts as the S&P 500 dropped 3% and gold surged above $3,400. They analyzed the dollar's status amid Trump's tariff policies.

Groman said a "tectonic sea change" was occurring in global finance, pointing to Trump's America First investment policy memo. "They're saying, 'Listen, take your money, invest in our factories and infrastructure and workforce or put it in gold, but our deficits are no longer going to be allowed to accrue in our financial markets without a tax,'" he explained.

Thorne said this represented a rebalancing of global trade imbalances. "The global economy is closed, which means deficits and surpluses must equal," he explained, adding that the U.S. had transformed "from a creditor to a debtor nation."

Both experts said U.S. debt sustainability was concerning, with Groman explaining that interest expenses plus entitlements now exceeded government receipts. "That's junk. That's highly speculative junk. It's not AAA," he said.

On investments, Groman said gold and Treasury bills were advisable, predicting gold could reach $7,000. Thorne agreed, predicting $5,000 gold by 2028 while explaining "negative rates" would be a necessary policy response.

GOLD: Why Central Banks Are Stockpiling Gold: $3,700 Next

Nicky Shiels, Head of Metal Strategy at MKS Pamp, discussed gold's historic price surge beyond $3,400. She explained this primarily related to the global de-risking of US assets amid the Trump administration's trade policies.

"Right now, there is no asset class correlated with gold. It is on its trajectory, and a large part of that is because of central bank demand," said Shiels.

The analyst predicted gold could reach $3,700 in 2025, citing the inflation-adjusted historic high of $3,580 as the next target. Shiels explained an unusual market dynamic existed where gold prices rose alongside bond yields, breaking traditional correlation patterns.

This disconnection stemmed from investors questioning US Treasuries as safe havens. "It is the political regime and the uncertainty around policy," Shiels explained regarding dollar weakness despite rising yields.

Shiels predicted a less substantial increase for silver, projecting a $32-35 range. She explained silver's underperformance relative to gold often indicated recession concerns.

Regarding potential risks, Shiels said trade war implications outweighed any benefits from geopolitical de-escalation in Ukraine or elsewhere, creating what she called an "uncertainty chaos premium" for gold.

GOLD: Debt Crisis Here, Gold Price Explosion Not Over, Here’s How High

CPM Group's Managing Director Jeff Christian analyzed gold's record surge beyond $3,400, explaining it primarily related to market reactions following Trump's April 2nd announcement of global tariffs. Christian had updated his 2025 gold price projection to $2,956, up $250 from six months ago.

Christian explained an unusual market divergence existed where gold rose while bonds fell and the dollar weakened. "Gold is outperforming stocks, bonds, silver, copper, and oil because gold is that safe haven everyone runs to in economic tough times," he explained.

Regarding recession concerns, Christian said major institutions now aligned with his earlier predictions. "Goldman Sachs says it's a 46% chance of a recession. JP Morgan says it's 50%," he said.

On Trump's economic policies, Christian described them and said the president's inflation claims were incorrect. He predicted that proposed tariffs could affect the federal deficit, potentially adding "$580 billion a year over the next 10 years."

Christian predicted silver would rise but would likely not outperform gold, projecting an average price of $32-33 for 2025. He explained China's rare earth export restrictions represented a response to US trade policies.

WHAT TO WATCH

Friday, May 2, 2025

Earnings: Berkshire Hathaway, ExxonMobile, Chevron, Apollo
U.S. Unemployment Rate Report - Monthly economic indicator published by the Bureau of Labor Statistics that measures the percentage of the total labor force that is unemployed but actively seeking employment

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