Powell on 3/7 likely to reiterate "data dependence" and +25bp path = supports our 8-week rally thesis. If "rule of 1st 5 days" intact, S&P 500 could reach ~4,250 by end of April.

Last week was a test for the S&P 500 uptrend and test was successful...

In our conversations over the past week, few investors are outright constructive on stocks. It is getting harder and harder to find a bullish investor -- many of our institutional investor zooms start by asking "so, does anyone agree with what you are saying?"

Many are glad that specific stocks are rising, but nearly all view that these are idiosyncratic ideas and that the larger trend for stocks remains down. There are many reasons investors remain bearish, we understand that:

BEAR: Inflation is high and this means the Fed is still waging an inflation war. US: Of course, our view is that inflation is falling and the Fed has become data dependent, so the crisis mode of 2022 is gone.BEAR: Yield curve is inverted and coupled with Fed hiking means a recession is inevitableUS: The yield curve is inverted because inflation itself is in backwardation. Inflation is expected to be higher 1Y and 2Y forward vs 10Y out, so this has to show up in bond yields. Also, the high Fed funds of today doesn't mean rates are this high 24 months later, hence, 2Y can be below FF.BEAR: Earnings estimates are falling, hence stocks need to go down. Plus valuations are high.US: Stocks bottom 11-12 months before EPS ...
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