Goldilocks

The Playbook

Powell Raises rates while Biden keeps spending so who wins ? Stocks win because you get Tame inflation while gov spending fuels Earnings Growth. This is the Playbook

Dow Theory -52 week highs

Mixed Recovery - Chips/Banks/Housing

Clear Sector Rotation

Spreading to Emerging Markets...ETF's seeing 52 week highs

The Preference For Equity Debt over Gov Debt

Goldilocks

Growth up ↗️ Inflaiton Down↘️

I still believe we are in WAVE TWO FOMO. The economy is expanding while inflation contracts, ther's a lot of DRY POWDER , and a lot of reason's to chase, let's dive in..

CORE PCE saw the Largest Monthly Drop from Peak, Sticky not so sticky

Over the past three months, we have witnessed Disinflation, Some Deflation, and almost no Inflation

The Rally is Broadening, Inflation is falling, butttttt

Global Funds Managers remain Underweight Risk.

Wall Street's Most Bearish 2nd 1/2 Outlook EVER

Extremely Negative in the Face of q2 Earnings bottoming

Q2 Earnings are bottoming

64% of $SPXcompanies have beaten revenue estimates for Q2, below the 5-year average of 69% & above the 10-year average of 63%.

80% of $SPX companies have beaten EPS estimates for Q2, above the 5-year average of 77% and above the 10-year average of 73%.

IF EARNINGS CONTINUE BEATING EST , WAVE TWO FOMO

The Economic Recovery

GDP growth is bottoming as well as durable goods Order have an economic lead

Nike Swoosh Recovery

Demand is back

The Housing Market is recovering

Home Prices Are decelerating from Post-Pandemic Peak

Shelter will eventually Un-stick the Sticky part of inflation

Consumers Are Healthy

Consumer Confidence (Employment + Spending) & Consumer Sentiment (how they feel about durable goods consumption) is rising.

Inflation expectations next 12m &five 5 years remain low

70% of the economy is driven by Spening, consumers have income and savings

The Fed Meeting

Powells Langauge was very optimistic about the economy and data-dependent about

No recession in sight ( acknowledege housing is bottoming)
We will stop hiking before 2% and cut before 2%
Increrdible Progress on latest CPI
We are data dependent, will Focus on Economic Activity, the Jobs market, and Inflation