Hartnett: Bears need to be patient

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The excellent Michael Hartnett at BofA.


Tale of the Tape:classic Jan reversals…’22 losers ofcrypto, USTs, China, credit, stockssmashing’22winners of cash, commodities, US$ YTD; S&P500 barometer“so goes January, so goes the year” correct 71% of time since 1929.

The Big Picture:-0.1% CPI & 205k unemployment claims…don’t get more Goldilocks than that; consensus now 50bps hikes H1’23 then 200bps cuts next 18 months (Chart2);SPX range 3.6-4.2k but all positioned for 3.6k before 4.2k; China reopen, EU energy boost, US fiscal/labor market…GDP/EPS recession trade requires patience; pain trade up ‘til Fed rate forecasts, yields, credit spreads trough signal peak Goldilocks.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.