If you happen to informed me at the start of march that the next would occur:

Silicon Valley Financial institution fails. So do Silvergate and Signature. One other, First Republic, can be on the ropes. The fed, treasury, and FDIC should work collectively to forestall a run on regional banks. After which per week later, the fed would nonetheless hike by 25 foundation factors.

Banks fail, fed hikes. If I had that data beforehand, I might have guessed the inventory market could be down greater than 10% on the month.

Whereas regional banks are getting destroyed, down practically 30% in March, the S&P 500 is up 1%, and the Nasdaq-100 is up a whopping 7%. I gotta be sincere. I don’t get it.

The fed hiked yesterday. It was unanimous. They took charge cuts off the desk and indicated that their struggle with inflation isn’t over. Shares understandably didn’t react effectively to Powell’s phrases and adopted the everyday post-fed playbook of bouncing after which puking into the shut.

As I kind, the S&P 500 is up practically 2% on the day. I hesitate to present an excessive amount of credence to short-term market gyrations, quite a lot of that is simply noise, however getting again to what I wrote earlier, why aren’t shares taking place?

It’s arduous to make a basic bull case for the inventory market proper now. Does anyone assume the financial system will speed up over the subsequent couple of quarters? Does anyone assume that firms will develop their earnings per share by means of the remainder of the yr?

It’s additionally arduous to make a bull case on valuations. No matter your most popular metric, shares aren’t low-cost.

The one factor I can consider that’s holding this market up is that everyone agrees that issues are trying dangerous proper now. And perhaps that’s sufficient to de-risk shares. Not less than for now.

When everybody expects the market to do one factor and it does one thing else, I feel it’s essential to be openminded to the concept perhaps the market is aware of one thing that we don’t.