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Following last week’s two-day S&P 500 swoon when bad economic news was bad news for stocks, the index rallied nearly 4%, led by the most shorted stocks, unprofitable highly shorted tech names, and some chatter that investors were returning to mega-cap Tech into Monday’s close.  With the equity market moving up and dovish hopes increasing, the pressure has certainly shifted away from the optimists to the less bullish/hawkish forecasters, which includes yours truly. 

As I interacted with clients over the last two weeks (and my calendar has been quite full), there seems to be two main camps:

If a client is generally an optimist over time, more accepting of technicals, flows, and positioning, with a more sanguine view for the path of monetary policy for the FOMC, they seem to be quite confident that the low in equities is definitively behind us and a strong rally is in store for 2023.  They are dismissive of nearly all negative points and the main argument is — “everybody knows that and it’s already been discounted.” The other camp are investors that, over the years, have shared a more balanced view between bullish/bearish, that are more driven by looking at idiosyncratic company fundamentals, longer time horizons, generally have less tu...

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