It’s been a quiet session, but there is a lot of tension beneath the surface, as the tug of war between bulls and bears has intensified.  The bears no longer shouting from their soapbox to a sea of beaten down investors whose hopes were hanging by a thread.

So, what’s changed?

The calculus on a Powell Pivot. This morning Bloomberg released its latest survey of economists who agree that next week the Fed will hike 75 bps, but thereafter expect a downshift.  The bottom line is everyone is in the recession camp right now. The debate is shifting to how deep and how long it will endure.

The release after the open of the S&P Flash US PMI composite underscores just how quickly the tables are turning.  Output tumbled to 26-month low landing at 47.5.

Of course recession isn't ideal. But I think the market has been pricing it in before the fact, as it always does, and it will be pricing in an ending to the recession as its the top story every night on mainstream and financial media.  They won't lay it on as thick with Biden in office, but it will be hard to avoid. 

The market is still ranged bound and in the grasp of a mean bear.  But it has loosened up enough of late to give investors hope and some even courage. 

Have a great weekend.