This Bear Still Has Claws
We are officially one-quarter into 2023, and it already feels like a year’s worth of activity.
The last words I wrote in our 2023 Outlook piece in January still have merit in our minds. There was a great deal of angst after a brutal year for investors in 2022.
“A rally to start the year would catch most by surprise. We could see that play out: The Economy keeps slowing, the Bond Market tells us inflation is less of an issue and the Fed will ultimately end its choking rate-hike campaign. That would provide more breathing room for stocks for another Bear rally before ultimately bottoming out. That’s our base case right now. We’re staying nimble. One thing seems certain: The volatility will continue in 2023. We are prepared and positioned accordingly.”
Market volatility has definitely been the theme thus far, as an explosive January gave way to some gain evaporation in February. Investors grappled with the still stubbornly high inflation and a shock with some banking failures not seen since the Financial Crisis, a decade and a half ago. March brought back some of the gains. But the rallies have resulted in lower highs. A breakout has been restrained. Fakeouts were the result. The Bear Market from 2022 still has claws.
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