"Rule of 1st 5 days" implies +26% gain 2023 (7 of 7 times). Dec CPI (1/12) could persuade markets it is less costly for Fed to change narrative than drive US into recession = financial conditions ease = upside stocks.

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With S&P 500 up already >2% in 2023, cash yielding 4% doesn't seem such a good alternative

With the first 6 trading days of 2023 behind us, the S&P 500 is off to a solid start with >2% gains. We have a lot of clients telling us they are being "paid to wait" because they are earning 4% on their cash. This is true, but we think the mood of these investors will change when the S&P 500 gains 4% (this month?). Because, this will suddenly highlight the opportunity cost of owning cash (which takes 1 year to earn 4%) whereas S&P 500 could be on track to gain +25% or more.

in simple terms, 2023 is shaping up to be the opposite of 2022at start of 2022, bonds warned inflation far bigger risk and Fed "behind the curve"at start of 2023, bonds warn inflation tracking far below Fed and consensus, and Fed "too hawkish"at start of 2022, investors were bullish at the start, and stocks fell 2% in the first 5 daysat start of 2023, investors are outright bearish, and stocks surged >2% in the first 6 daysPer the rule of "first 5 days," since 1950, when prior year is "negative" and first 5 days >1.4% (n=7), equities average +26% gain and higher 7 ...

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