Key Takeaway: Index-level gains provide the veneer of a robust rally. Weighing the evidence, however, suggests more risk than opportunity in the market right now. Macro conditions remain a challenge even if widespread deterioration is not being observed. Bonds are beginning to realize that the Fed is serious about its intention to keep rates higher for longer (and show that it learned its lesson from the premature pivot in 2019). From a market perspective the absence of strength beneath the surface leaves index-level gains sitting on a shaky foundation.
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