Authored by Simon White, Bloomberg macro strategist,

Stock-market valuations and prices are exposed to more downside as households reduce record levels of leverage in a slowing economy.

Stocks are putting in a defiant performance in the face of – to use understatement – a challenging environment. The S&P 500 is now less than 10% lower from its recent high as the market takes a glass half-full attitude that tariff policy will work out just fine in the end.