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Was The Bull Market Over Before It Started?
One, but certainly not the only, criticism of the newly-minted "bull market" in US equities revolves around the idea that stocks aren't priced for policy realities.
Implicit is the notion that because inflation has shown no real inclination to recede where it counts (e.g., in the collection of categories that comprise the Fed's "services ex-housing" measure), the best-case outcome in terms of monetary policy is "higher for longer." The worst-case is a resumption of hikes (plural) following an a
Equities are built on a sand castle of sentiment. It’s positive now. A wrong footed outcome for equities is inflation quickly drops at the same time growth drops significantly. It would not be pretty….