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Bear narrative has another problem. S&P 500 two consecutive quarterly gains always happen at start of new bull market. 5 reasons gains continue in April.

Increasingly looks like "bears are trapped" praying for new lows

The first quarter of 2023 (1Q23) is coming to a close Friday (one trading day left) and despite a wrenching banking crisis, the S&P is up +5.5% and up +2.3% for the month of March. Many skeptics (anecdotally, the majority of our clients) are likely sniffing at these gains, as mere noise until the bear market re-asserts itself. But for reasons outlined below, we believe 1Q23 gains now solidifies that "bears are now trapped" -- meaning, our analysis suggests that the "lows are in" (10/12/22) and these gains continue in April:

The banking crisis is looking more like "clean up in aisle 7" (Mr Mom, 1983) than a full blown crisis. Granted, regional bank are languihsing, but the crisis is not widening to a broader loss of confidence in the banking system. This started with a "social-media" generated bank run and those runs have not continued. Second, the Fed made a "dovish hike" in March and we expect incoming inflation data to support a further pause (softer inflation). Notably, consumer inflation expectations now stand far below reported CPI -- U Mich mid-March +3.8% vs Feb CPI +6% YoY. This is the largest negative spread (-220bp) since late-1982. This gives argument for Fed to "tolerate" CPI reports a...

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