The Monday Morning Playbook: Week of May 27, 2025

Good morning,

“History doesn’t repeat itself, but it often rhymes.”

My good friend, and Carson Group Chief Investment Strategist, Ryan Detrick says this so much that when I use it, I actually want to quote him instead of Mark Twain.

And I even dropped it in a report a few weeks ago when talking about how current growth-led style dynamics could be similar to what we saw in 2018.

But after last week’s corrective action, we have to revisit another recent period: August 2023.

As last week’s Playbook highlighted, the Fitch US credit downgrade kicked off a 10% correction in the S&P 500. But the downgrade was more coincidental than causal.

The real catalysts were internal overbought conditions and a breakout in Treasury yields. We already had overbought conditions, and last week, we added a breakout in yields.

The US 30-year yield surged above 5%, briefly eclipsing the October 2023 cycle highs before reversing lower. However, the breakout is intact, and this isn’t just a US story.

Japan’s 30-year bond soared to a 24-year high, while their newer 40-year bond yield set an all-time record.

So, do we have a 10% correction on deck like we saw in the fall of 2023?

A 10% correction can happen at any time, but I’ll take the under. Buyers stepped into leading stocks on Friday and supported the S&P 500 above its 200-DMA. And even if we were to lose the 200-day, we would need to see 3 additional support levels broken before we could get to a 10% correction.

As I implored readers last week, the very short term is always unknown. But history suggests investors willing to bet on returns over the next year should be using this pullback to increase equity exposure.

This week’s report will review:

• The breakout in rates

• Major index technicals and breadth

• Semiconductors

• Strength in China

• Important individual stock charts

• and more!