In our last commentary, we suggested that a higher-for-longer interest rate environment, flattening global growth, and fears of an impending recession would put pressure on equities over the short-term. While we still hold that perspective, we were clearly a bit early in expressing that view and have been a bit surprised by the level of optimism and enthusiasm of late. The tug-of-war between fundamental investors respectful of traditional econometrics, and momentum strategies that embrace a psychology of exuberance and complacency with risk, has favored the latter.
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