Bull riders take aim

Welcome back team. I'm your host, Phil Rosen, back in Manhattan after some weeks on the west coast.?

Today, it's as oppressive as a sauna with no exit, but I missed it all the same. (I can't get enough of this city — I even wrote a book about it.)?

Luckily I've rolled my sleeves up this morning because we've got a lot of ground to cover. Markets haven't rested since last week's CPI print, and at least some on Wall Street seem to have tilted more bullish.?

The bears are still on the prowl, but today we're visiting their more optimistic counterparts.?

Let's get started.

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1. JPMorgan Asset Management's chief strategist sees upside ahead following Wednesday's inflation reading. The dip, according to David Kelly, suggests high prices are starting to roll over.?

"I would be fully invested in equities at this point because I do think that equities can move higher here," he told Bloomberg on Friday.?

Kelly expects to see another positive CPI report for August, with inflation showing improvement beyond what official data may suggest. Next month, Kelly anticipates a 50-basis-point rate hike from the Fed, and a 25-basis-point hike in November.?

But given that the Fed has had to stomach frequent criticism for being behind the curve on inflation, Kelly said policymakers have remained wary about celebrating any fresh data, which means sentiment could stay weak.

"The problem is [the Fed has] been on a diet of humble pie all year," he said. "And that's what's causing them to be cautious in declaring any progress here."

Fundstrat's Tom Lee echoed a similar bullish sentiment on Friday. Wall Street, Lee said, is becoming more hawkish than the central bank — which gives him a bullish outlook for stocks.?

The analyst pointed out that sell-side economists expect the Fed to continue hiking rates through 2023 to as high as 5%, well above Fed expectations.?

But bearish Wall Street firms seem to be ignoring signals of falling inflation, he added. That leaves Lee aiming for a contrarian bet.

"We believe the S&P 500 will see a recovery similar to 1982 and thus recover YTD losses before year-end," Lee said.?

In other news:

2. These recession-busting stocks collectively crushed the S&P 500 by 41% in 2008-2009. And there's a good chance they could repeat that performance this time around. Even in a downturn, there's a lot of money to be made if you pick the right names — see the list of 15 here.?

3. Lori Heinel oversees $3.5 trillion as State Street's investment chief. She told us where she's starting to place the firm's historically large cash holdings to work in an uncertain landscape. These are the investments she's eyeing right now as the market grows more complex.?

4. Billionaire crypto founder Sam Bankman-Fried explained how investors can determine what makes a safe yield product. In his view, when a crypto platform advertises returns that are too good to be true, oftentimes they are. The FTX chief shared where he thinks the tech market will have exponential growth over the next decade.

5. Ethereum has rallied in a big way over the last month, soaring over 80% even amid the broader crypto winter. But some traders expect the token's rally to fizzle out as the upcoming proof-of-stake system will mark a "sell the news" event.

What about you? Do you think markets are at the start of a rally, or are we going to see another drop in stocks? Let us know in the comments.

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This newsletter was curated by Phil Rosen.