With two months in the books, 2024’s been generous to equity bulls.

Both big-cap US benchmarks were on track for 4% gains in February, and each is up handily for the year. I’d say it’s been a frustrating experience for bears, but it really depends on what you mean by “bears.” Nobody likes to be wrong, but… well, if you’re still employed and you’re still making five or six or seven or eight times the median national income, I’m not sure you’re especially vexed that the S&P’s well above your year-end target, which you can always just mark to market if the shoulder taps get aggressive enough.

Global shares were gunning for a fourth consecutive monthly gain. As the simple figure below shows, that’s the best run since early 2021, when “stimmy” was still a hashtag and Joe Biden was still a popular president (ancient history, I know).

Readers will scoff and some of you will marvel at the ostensible disconnect between someone (me) who’s so overtly pessimistic about the world adopting such an allegedly naive view of “dumb” equities, but the truth is: Stocks tend to go up over time. Even the Nikkei’s not an exception anymore.

Remember: This is all made up. Markets, money and corporations themselves are figments of our imagination, so it shouldn’t necessarily come as a surprise that we continually find ways to “decide” that the value of the financial stakes we hold is greater than it was yesterday or last month or last year. What else would we do? Decide we should be poorer? That doesn’t make any sense.

Anyway, I like this quote: “The market always needs to focus on something, and with earnings out of the way and the rates outlook priced in, inflation is the next catalyst.” That comes from somebody I’ve never heard of at a bank I don’t care for and so shall remain nameless, but you can trace the source from Bloomberg here. I doubt the strategist meant to underscore the extent to which the obsession over January PCE data out of the US (due Thursday) was in part a function of an otherwise slow news week, but mission (accidentally) accomplished.

That’s not to say January’s PCE print wasn’t a crucial release. It was. Rather, it’s just that if something a little more explosive were going on — figuratively in, say, an Nvidia earnings report or literally in, for example, Israel vaporizing 500 civilians at a hospital to kill three Hamas members who came up out of a tunnel for air — PCE wouldn’t have garnered the same number of headlines this week.

For what it’s worth (and this is really just me reiterating a point made in these pages on dozens of occasions this year), rate cuts without a recession are historically, and intuitively, auspicious for equities.

The table above, from BofA, gives you some context. “In the seven episodes since 1950 when the US economy did not crash into a recession within a year of the first Fed rate cut, the S&P 500, almost without fail, delivered positive returns on a three-, six-, nine-, and 12-month horizon from the date of the first cut, with average returns of 10%, 12%, 14% and 15% respectively,” analysts including Ritesh Samadhiya, Candace Browning Platt and minor celebrity Michael Hartnett wrote, in a February 28 note.

The caveat (actually there are too many caveats to plausibly and expeditiously enumerate) is that sentiment’s overdone. On one BofA metric, for example, the market mood borders on euphoria. That’s a contrarian indicator.

And yet, what can you do? Fight the rally? That’s not always conducive to financial success. As BofA’s analysts put it, “the buoyancy does open up the potential for a pullback [but] it may be worthwhile to make do with euphoria.”

I don’t know about anybody else, but I’ve made do with worse.