With a hawkish Fed, a narrative could be easily spun that it will turn out to be bearish for equities. And perhaps it will. But we could fine-tune it and argue that there may be some extra gas in the equity market’s tank, as balance sheet reduction is yet to materialise. And that leaves the best part of six weeks for equity traders to enjoy maximum stimulus from the Fed. With that said, the recent rally on the S&P 500 futures contract occurred on lower volumes. And unless we see volumes increase as prices rise then we’ll treat further gains with suspicion.
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