By Graham Summers, MBA
Stocks are rallying today because they believe:
1) The bank crisis is over (it isn’t).
2) The Fed is back to easing (it isn’t).
3) The economy is strong (it isn’t).
4) The Fed can achieve a “soft landing” (it can’t).
The Russell 2000 (IWM) which is more closely aligned with the economy and growth has figured this out. It’s only a matter of time before the S&P 500 “gets it.”
Meanwhile, regional banks are back at the lows.
![](https://gainspainscapital.com/wp-content/uploads/2023/03/sc-9.png)
Financials usually lead the broader market. Maybe this time is different?
![](https://gainspainscapital.com/wp-content/uploads/2023/03/sc-12.png)
Or maybe the next leg down is coming and coming soon.