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FLASH COMMENTS:

I guess the bear market is over.  

The DJIA just posted its best monthly return since January 1976 (+14.41%), its second-best month since 1936, and its best October as Chair Powell will trade in his talons for a white dove costume during his post-Halloween FOMC press conference, as inflation is ready to plummet and labor slack is surging, which will lead to a powerful upward shift in P/E multiples rising back to over 20x and expectations for reaccelerating forward profit growth.  Well, as nice as that may sound, my work suggests that the mega-happy ending from Wayne’s World remains a lower probability scenario. 

If the commentary following the upcoming two-day FOMC results in a dovish interpretation or explicit comments about slowing the pace of hikes/pausing, which I have some skepticism about, my work suggests that this would not actually be bullish despite the possibility of the equity markets initially rallying on the news.   Why do I think that?  The combination of my key indicators, deep discussions with my economics sources, and my own read of the macro tea leaves suggest that potentially slowing the pace of hikes or pausing will only open the door for the Fed to extend the rate hiking cycle for longer and high...
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