At the beginning of the year, the consensus was that the stock market would experience a challenging first half followed by a strong second half. Put another way, the bear market would extend into the first half of 2023 but eventually give way to a new bull market in the second half.

While I do not place much credence on a 20% move as the defining factor of a bear or bull market, as the S&P 500 flirts with a close 20% above the October low right as we reach the midpoint of the year, my mind drifted to the now debunked thesis.

What if consensus not only got it wrong, but got it completely wrong? What if the first half of the year belongs to the bulls, and the second proves to be property of the bears?

To be clear, these thoughts lack the thoroughness and nuance required to be considered a thesis worthy of making investment decisions.

However, these thoughts are still worth considering.

In my opinion, stocks have shown enhanced resilience to stronger economic data since the Fed Whisperer, Nick Timiaros, reported that the Fed would prefer to skip raising rates in June to better evaluate the impact of their policies. Essentially, the market believes the Fed will pause, at least temporarily, as long as data remains mixed. As a result, this report has, to a substantial extent, de-risked macroeconomic releases until we reach that anticipated pause.

Once the skip occurs, it is possible the stakes are higher for every macro data point that follows because a skip creates the perception a true pause is on the table. Higher stakes do not necessarily imply downside, but they do imply a return of volatility, which has been unusually absent as indicated by a sub-15 VIX that has been unable to find a floor.