Asymmetric risk - will transform over the months ahead. It's been essentially a bifurcated market for many months, hence asymmetric perspectives allowed denying prospects of catastrophe, because most stocks had already crashed.

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During this time impressive resiliency to the S&P was provided by a handful of big-cap stocks. The asymmetric situation was not properly recognized by the US Fed, as they mistakenly thought this was still a time when taming inflation with their stale (inherent latency) approach would gain traction.

I was actually stirred a bit when last week a couple Fed-heads naively tried to perpetuate that idea, by stating that 'climate control' and 'wars' aren't anything they look at, as wouldn't move their models. Balderdash. Now we hear of 1.7 degrees centigrade as being breached soon, and that's a red line for humans in many aspects of life, not the least of which is food costs (and availability), a direct impact on inflation whether the Fed wants to remain stubborn or not.

I was actually stirred a bit when last week a couple Fed-heads naively tried to perpetuate that idea, by stating that 'climate control' and 'wars' aren't anything they look at, as wouldn't move their models. Balderdash. Now we hear of 1.7 degrees centigrade as being breached soon, and that's a red line for humans in many aspects of life, not the least of which is food costs (and availability), a direct impact on inflation whether the Fed wants to remain stubborn or not.

Anyway we face asymmetric concerns going forward: 1) cutting rates or bare minimum not hiking, so as to stabilize economies where they can, realizing it's not possible to tame inflation to the degree they want, 2) realize geopolitical or strategic asymmetry is an issue too, starting with Russia's internal evolution or revolution as they recognize Ukraine going to prevail, remain independent, as well as move toward the EU if not overtly in NATO (how Russia felt pressed in pre-war days is irrelevant as Putin started a war over it and he's losing that), 3) the global economic situation either gets tame with globalism reconstituted a bit, or if China moves on Taiwan you get not just major-power asymmetry of course, but also big inflation since so much of everything relies on trade, and 4) perhaps what I said two weeks ago prevails: the market isn't dropping as it is focused on a 'new era' . . . dominated by AI . . . whether an abundant time is promised or not, that's different that the pedestrian typical Fed concerns.

In-sum: the Fed should start pivoting to worry about recession, and that could actually generate record S&P levels, with catch-up recovery by lots of smaller-caps as this evolves. Especially in focus-areas like 'soon profitable' AI stocks.

Intelligence Revolution' is a term that's been used to describe astounding capabilities and changes that will transform (already has somewhat but very early stages) research and working routines for so many industries.

Reaching into this exponential shift (and the core of 'why' this Bull market isn't entirely dependent on lagging Fed monetary policy) will be ubiquitous change in the capabilities of computers, the conclusions 'they' will make (area of slight caution for the operators), the integration into data-centers (helps not just the N'Vidias and AMD's of the world, but definitely those), but also interaction by voice in everyday environments, which is where the SoundHound's come in. (So too in military realms, such as BigBear.ai, which lags due to early SPAC holders selling again at low prices, which usually sees shares rebound after.)

I am increasingly serious about what the majority of analysts and managers of money 'missed' this year, and that's not just the fact most stocks crashed last year (though there is that), or traditional issues like 'interest rate', 'debt ceiling' or geopolitical issues, but rather that this is a 'new age' and increasingly some are grasping that.

Besides the real lure and genuine future of the 'Intelligence' era, there are credit market and similar concerns, with more defaults coming.

How markets treat those is debatable, but with so many hedge guys suddenly capitulating to bullish posturing, I can't help pondering whether we're nearing a shakeout, after running-in a few more shorts. Just keep that in-mind, without getting too excited about downside, which could relate to defaults, to anything geopolitical, but not a debt ceiling issues (at least as appears presently).

Hikes are taking more effect, the 'AI era' can't cover for actual financial failure in some banks and/or commercial real estate ventures, and so on. So while I'll continue to view shakeouts as opportunities to get in-not-out, there are more variables out there, particularly after a couple more permabears turn turtle.

Grinding higher for now as far as S&P, and varying behavior elsewhere.

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