It's been very painful and I think it's clear that not only are equity markets nervous and edgy, but they're hyper, hyper sensitive to inflationary data. Whether it's FOMC meeting or even today's payroll numbers, it's really about getting some comfort that inflation is breaking.

From our perspective, it's been painful. And I don't want to sound like I'm trying to be stubborn, but I think the risk-reward for equities here has improved this week. I know it sounds glib to say, Well, everything's 5% lower, that's why you like it, but No. 1, on the FAANG trade, I just think that multiples are still becoming gifts, especially if we have a soft landing or even a mild recession.

How do we apply this to 2022? Please counter-trade consensus panic — whatever the panic is

Before telling us that this means the Fed is the only thing that matters, that is not how I see it. The takeaway is:

  • consensus panics about something
  • says there is no way out
  • except for markets to crash
  • counter-trade this

The future is uncertain, so take this as simply another perspective

Equities have rallied post-FOMC 5 of the last 6 meetings

Stocks initially rallied after Fed day only to fall sharply Thursday. Below, we have highlighted equity performance post-FOMC in the last 6 meetings:

5 of las...

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