Bull Market or Rally in a Bear Market?

Our short answer to the question posed in the title: "Bull market." The S&P 500 rose to a new high today of 4198.05 for 2023 taking out the February 2 closing high of 4179.76 (chart). The market has climbed a Wall of Worry thanks to Wall Street's Worriers, who've predicted that the banking and the debt ceiling crises could make their widely expected imminent recession worse.

They could still be right, at least about a recession (eventually). However, concerns about both crises are abating rapidly. The S&P 500/400/600 Financials rallied in recent days. We think they are bottoming (chart). We are expecting a wave of mergers and acquisitions among the regional and community banks. Instead of worrying about which will fail, investors should bet on which will be acquired.