What if None of it Has Been Priced In?

Back in early 2020, as Coronavirus headlines swirled around the world, U.S. stocks totally ignored them well into February. It became a common trope that it was all priced in, as clearly the market was well aware of the headlines and the spread of Corona to many countries besides China (Italy e.g.). 

Of course, a few weeks later the market would melt down in crisis mode as the virus officially reached the U.S. and began to spread. 

In the summer 2011 the market was well aware of the European debt crisis as well as the fiscal cliff debates here in Congress for much of the summer. The market was wobbly but held up OK until late-July when it had a meltdown of its own. 

And then, of course, was Lehman, which failed on September 15th, 2008. But stocks, despite monstrous volatility, tried to hold up well for a few weeks until finally crashing in the first week of October. 

My point with all of these examples is that if you do not factor in delayed reactions by the market to certain, obvious situations then you are not mindful of history. Just because an event, or series of events, is obvious and all over the news does not necessarily mean the market has immediately priced it in. 

In the current market we have The Fed suddenly hell-bent on fighting inflation they intentionally let "run hot" off the pandemic. 

Bulls seem vocal, cocky, and boldly predicting a face-ripping rally after tomorrow's expected 75 bps rate hike and Powell presser.

Bears seem more measured (beyond the usual suspects), fearful of a squeeze scenario, and reticent to hang their hats on Powell being as stridently hawkish as he was last month at Jackson Hole.

From a contrarian perspective, the above sentiment strikes me as incredibly bearish.

But considering the technicals, seasonals, monetary policy, and retail-still-buying-dips feature are all bearish for equities, I do not need to get a random sampling of sentiment correct--I am just eager to see if the market actually did price in not only tomorrow's rate hike, but also the likely coming hikes later this year.