Recession fears have eased, as they should. Barely a month ago, the fear of a U.S. recession was palpable, even though econometric models mostly downplayed those risks. Over the past few weeks, most of those models have recovered even further and one in particular shows that the business cycle just hit a new all-time high. While the sample size is woefully small, stocks did well going forward on a risk/reward basis (chart 3).
We continue to favor the upside, believing pullbacks are for buying rather than selling the rallies.
Jeffrey D. Saut is chief investment strategist at Raymond James. 
