ORLANDO, Florida, May 5 (Reuters) - Wall Street's recent

rebound from its April lows suggests equity investors are

pricing in a benign outlook for the U.S. economy, which contrast

starkly with the more ominous signals coming from the oil, gold

and fixed income markets. Is this justified confidence, or

dangerous complacency?

If you had turned off all communications on April 2 and

logged back on today, you would find the S&P 500 roughly

unchanged, with no sign of the 15% slump suffered in the days

immediately following President Donald Trump's April 2 tariffs

announcement.

The S&P 500 has risen nine days in a row through May 2, its

best daily winning streak in 21 years. Meanwhile, the "S&P 493"

- the broad index excluding the "Magnificent Seven" tech

megacaps - is flat for the year to date, also remarkable given

the tumult over the past four months.

Contrast that with other markets.

Oil on Friday had its lowest close in four years and is down

25% on a year-on-year basis. While this partly reflects calls

for accelerated output hikes by OPEC+, the macroeconomic signals

flashing here are pretty clear: weak demand, sluggish growth and

disinflation.

Gold, meanwhile, is up 25% this year and still above its

"Liberation Day" close, despite drifting down from its recent

record high of $3,500 an ounce. While this is not an indication

of heightened disinflation fear, it is a sign of elevated fear

overall. Bullion's allure as the world's premier safe-haven

asset has rarely been stronger.

And what of U.S. Treasuries? The two-year yield has

rebounded in recent days but is still 40 basis points lower this

year, and rates traders are still anticipating at least three

quarter point cuts from the Federal Reserve this year. Both are

pricing in meaningful economic slowdown.

COLD SWEATS

Is this simply an example of the old adage that equity

investors are paid to be optimistic while bond investors are

paid to be pessimistic?

Perhaps, but there is some justification for Wall Street's

optimism. It's largely rooted in the view that the economic

damage inflicted by tariffs won't be as bad as feared a few

weeks ago, partly because the Trump administration has

backpedaled in the face of market ructions. In other words, the

"Trump put" is back.

Investors also have reason not to be too worried about the

0.3% GDP contraction in the first quarter, as it largely

reflects the front-loading of imports, a statistical anomaly

that will be quickly reversed.

It was a "gross distorted product", according to Goldman

Sachs economists, who anticipate a 2.4% GDP expansion in the

second quarter.

Moreover, while "soft" economic data like consumer sentiment

indicators continue to flash red, much of the "hard" data, like

employment figures, is holding up well.

And even if real growth this year is only 0.5% - Goldman's

estimate, which is at the lower end of forecasts - that still

implies nominal growth of close to 5%, if inflation tops 4%, as

many economists expect.

Importantly, earnings are driven by nominal growth rates.

While first quarter earnings are obviously "rear-view mirror"

numbers in the context of the trade war, around 74% of the 357

companies in the S&P 500 that have reported so far have beaten

analyst estimates, according to LSEG's Tajinder Dhillon. This

compares to a long-term average of 67.0%.

And the 12-month forward growth expectations for the S&P 500

are still running at a punchy 10%.

But that's not the whole story. Many firms have slashed

forecasts or declined to give any guidance at all.

Even though Trump seems very likely to dial down his initial

tariff numbers, the cost of doing international business is

still going to rise significantly. Whether that cost is borne

more by businesses or consumers remains to be seen, but in the

broader context of economic activity and corporate

profitability, the effect will be the same.

Tariffs haven't bitten yet, but they will. In an interview

with Bloomberg TV on Friday, Gene Seroka, executive director of

the Los Angeles port - the biggest in the country - pulled no

punches: "CEOs are telling me, 'hit the pause button'. Hiring,

off the table for right now. Capital investment, pause. And the

retailers are telling me that even 10% (tariffs), 'I'm going to

have to pass it on to the consumers'."

Bob Elliott, CEO at Unlimited Funds, reckons equities are

priced as if the last month was a "fever dream". The risk is

that investors break out in cold sweats in the months ahead.

(The opinions expressed here are those of the author, a

columnist for Reuters)

(By Jamie McGeever

Editing by David Evans)