The stock market is like a fighter in a movie, taking severe punishment in the form of rising rates and saying, "Is that all ya got?" to commentators asking "what is keeping him standing?" before a big comeback.

The economy remains surprisingly buoyant, despite the Federal Reserve's relentless rate increases to temper persistent, high inflation. Given that we're still in a real estate bubble, built upon a foundation of low rates and lax Covid-related fiscal and monetary policy, this is quite a remarkable feat. 

Despite the recent stress in the regional banking industry, both the stock and bond markets performed well last month. As a result of the situation, hundreds of billions of dollars left banks and flowed into money market funds that invest in Treasury bills, which now offer close to a 5% yield.

Stocks and bonds rebounded sharply in January as investors upped bets on a so-called soft landing in the economy. Expectations of falling inflation without a serious recession led to a flurry of dip buying, notably in the hardest-hit areas of last year. Falling longer-term interest rates pushed up bond prices but imply low inflation and probably a recession are in the cards. Economic numbers are by and large very good, considering how fast interest rates have risen, but then it takes time for rate increases to help start a recession, historically.