I’m sure this rally isn’t going to be trusted.

Honestly, I’m not sure I trust it either.

It’s Never Clear in Real-Time

Not to let price dictate sentiment or projections, but we’re ~5.5% from all-time highs on the S&P 500, and there are tailwinds beyond trade (tax/dereg) in the hopper… let’s not forget the lived experience of just three years ago.

As 2022 became 2023, it was foolish to deny what prices were forecasting and get left behind on the bear-case hill. Instead of getting smacked by a wall of pessimism, stocks climbed a wall of worry.

Stocks were right:

• The U.S. economy refused to give in to job market attrition.
• Inflation had peaked.
• The Fed was no longer adversarial.

The Result:

The S&P 500 tallied a return of ~26%

It wasn’t abundantly clear then, it isn’t abundantly clear now.

I say that to say this: it should be on the board that we will look back at Switzerland Detente as the “wasn’t it so obvious” moment that shifted the situation from an unavoidable wall of pessimism to a climbable wall of worry. No one can say for certain. Time will tell.