This Market Reminds Me of Warm Autumn Days

During most autumns there comes a moment, right around now usually, where we see unseasonably warm temperatures for a week or two in a row. 

In that instance it is human nature to extrapolate and think, "Maybe it won't get too cold this winter; Heck, maybe even winter entirely misses us this year!"

Of course, the moment always passes. And, soon enough, winter comes complete with black ice on dangerous roads, sideways, driveways. Frozen windshields, rock salt for the driveway and steps, pitch black at 4pm, and a general feeling that summer, in fact, will never come again. 

In the current market, stocks have been rising on bad news for several weeks now, including this morning' upside reveal in the face of ugly GOOGL MSFT SKX SPOT earnings selloffs. 

What likely matters more for now that rates and the Dollar are backing down as the market attempts to front-run a Fed pause--Not a pivot but a looming pause into 2023 from continuous rate hikes.

That said, my base case remains the same as it has for a month or so now: I expect a range/rally into the holidays before a new leg down in Q1 2023 as the market finally acknowledges a deeper recession incoming amid sticky high secular inflation. Yes, that downturn should help crush demand. But looking out over the next decade (or two!) I expect inflation to come roaring back each and every single time. The glory days of inflation going away so quickly are over. 

In other words, enjoy the unseasonably warm temperatures, not just outside in the northeast where I am, but also in markets. 

Just don't let it blind you to the fact that winter is still a comin'.