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The biggest takeaway for me on events of this week? Convincing and arguably decisive evidence the "bottom is in" -- the 2022 bear market is over.
- this was a big data week, with FOMC, 2Q GDP, housing and PCE (today)
- a huge miss on GDP, yet markets rally
- Fed raises +75bp and says focus remains on inflation, yet markets rally
- Russia turns down gas flow on Nord Stream I, yet markets rally
When bad news doesn't take down markets, it is time for investors to assess.
- Is this a trap driven by short covering?
- Most investors take this view
- Has economy reached the pivot point where incoming data will be decisively less negative?
- This is our take and disinflation tailwinds strengthening
...This is the August 1982 moment, bottom is in but Fed is two months away from a pivot
As we have written about in multiple reports in recent weeks, we think this is turning out to the be August 1982 moment:During Volcker's war on inflation, equities bottomed on August 1982this is two months before Volcker abandoned "anti-inflation" measuresMore importantly, stocks recovered the entire 36 month bear market loss in 4 monthsa mere 4 monthsin 2022, this means stocks could see "new highs" before YEyup, that is why we think S&P 50...