The bearish skew lunacy led to a 'scramble to cover' this past week; and at least a couple 'mainstream' Wall Street analysts recognize the momentum as it shifts ... but even there mostly do so in retrospect rather than foresight.

In all humility, recovery of a lot of decimated stocks from October forward was the call here; with caveats particularly with consideration of December waves of tax-selling, with one key message: it was a time to get in, not out, of stocks.

Day-by-day there are more macro optimists; but the pessimists still anticipate some sort of 'Wiley Coyote' moment. No Larry, that's not particularly likely; at the same time a retrenchment of the recent gains (proportionately) is feasible.

It is February after all, which is normally the 2nd weakest month of the year of course after September (more so than October's, which tend to be washouts to buy, not to sell). This year would be the 3rd year of a Bear Market, which is nonsense; since the real top was the bursting bubble of 2021 in most stocks; not the artificially propped-up 'buyback' phony rally to distribute that followed.

We would 'not' highlight risk of a sudden downturn in the economy, following a surge in jobs growth that dwarfed expectations in Friday morning's report; on top of the fact much was indirect and not really all that strong. Many left our work-force during the pandemic, one way or the other. I'd also point out that it's not a particularly difficult U.S. economy to read; rather there as a technical adjustment in the data, and some seasonal adjustments.

After the jump in US payrolls, which I believe is because people are adjusting to this 'normal' business level of interest rates and also declining prices which can occur simultaneously, you have an economy that wants to grow not quiet down to accommodate 'esteemed' economists. Now there is a superficial view as to whether the higher jobs (again that's more technical than realistic) lift the economy much, or we do get companies continuing to trim work-forces and inventories. Reality is both; depends on the sector. New areas are dynamic if they can afford to unfold from a capital standpoint.

Economist thinking from wanna-be-bears - or apologists for the nation doing a good bit better than they expected - is ludicrous. The supply-chain issues have eased; the infrastructure and 'Chips Act' spending is barely underway, and for sure there's a crowd thinking they're 'for the people', but are actually against.

I ponder sometimes if that includes some members of the FOMC with a form of arrogance that really thinks they can or 'should' break the economy to save it. They won't proclaim that of course, but they will ignore that they are fighting the White House and Congress by virtue of thinking higher interest rates fight jobs that are essentially mandated by the infrastructure programs and more.

In sum: there's a crowd denying the cyclical upturn that already took place; a few technicians (well most of them) that focus on the 'old' declining trend, not the 'inverse head & shoulders' bottom I believed constructed last Fall; as well as cynics who think things will come to a 'sudden stop'. (I say slow a bit.)

On the latter aspect, sure, we'll get a shakeout, but again, not disaster if World War III is avoided (I guess that's a caveat). Perhaps recent exchanges of ideas with informed 'military or defense' industry experts tempers optimism a bit, but at the same time there's demand for better equipment and 'software'.

I would emphasize 'Defense', as from what I learned more about this week as I delved into the arcane 'battle-space management' software realm, is that the military is involved in a bit of a scramble to modernize apparently antiquated, outdated equipment, and retrofit some of it with next-generation techniques. I of course have no idea (well not really) what they're specifically doing in many programs that are central to America's defense; but got ideas what we need.

One of the most crucial concerns you 'won't hear about' (panic avoidance) are fears regarding 'swarming drone attacks', such as an enemy might attempt on a major event. The Super Bowl already prohibits overflying drones; as metro stadiums even attempt to jam and 'force them down' when encountered more than just at NFL games. Local authorities have only limited capacity to do this. And don't ask me if China's balloon is actually a weapon (??).

The 'sudden stop' economic advocates are educated, but not thinking straight. It's almost like a surgeon who does a procedure the same way twice and does not question 'why' things still didn't go exactly as he or she had anticipated. In the economic case, this is not about a need for the Fed to lean harder; but for the 'passive' investing crowd (that prefers Indexes, or ETFs or bankers hours for that matter) to recognize there's another focus going on in America now. It is defense of our lives and stature, and I think the EU President and leader of NATO express it sometimes better than those here. Behind the scenes there's real concern going on, and it's not just to increase Defense Budgets or the like from what I can glean, and that makes it serious.

More another time; but it's not all about driving profitability; it's not all about all the cost control discussions, which are valid but interim concerns, and there's the prospect that Americans in the market are doing what they do best; hence disinclined to follow the gloom & doom pied pipers trying to market pain.

More By This Author:

Market Briefing For Tuesday, Jan. 31
Market Briefing For Monday, Jan. 30
Market Briefing For Thursday, Jan. 26