We are the furthest thing from stock market prognosticators. But the policy environment – which we do know about – remains fairly bearish right now. The unholy trinity of Biden/Pelosi/Schumer are still pushing Build Back Better tax increases, oil and drug price controls, antitrust legislation (with the support of some Republicans), and global minimum tax nonsense. The Democrats realize the window is slamming shut on their progressive dreams, so they will make a last sprint to do as many harmful policy initiatives as they can before the November elections.

We are also thoroughly unimpressed by Fed chief Jerome Powell who appears to us to be a standard Keynesian in his approach to monetary policy.

The best scenario we can hope for over the next six months is for Washington to do as little as possible.

As such, we thought we would warn against undue optimism and bear market stock market rallies. During the 1970s, when stocks lost more than half their value after inflation, there were many of these buying sprees. And here is the evidence from the last two recessions, 2000 and 2008 (provided by stock analyst Charlie Bilello.

Some of the biggest bounces in history have occurred during bear markets, as we saw from 2000-02 and again from 2007-09.