With widespread expectations that this current cycle was ending, a positioning squeeze was a key driver of the most recent rally. Now, after the squeeze, there is a tug of between factors imparting resilience and recessionary forces.

Near term, with a number of potential negative catalysts, the typical pullback underway can extend.

Further out, the question is whether growth and inflation surprises can continue. We see the bar low for surprises on growth, but not for positive inflation surprises.

Our house view remains that of a quick sell-off and rebound to year-end, leaving the S&P 500 close to current levels, with year-end target of 4,500.