Big Picture Market Thoughts September 19, 2023 Our belief is that the equity market most likely reached a cyclical peak in January 2022 due to historic levels of overvaluation, extremely bullish investor sentiment and positioning, and the acceleration in inflation that brought about the most aggressive Fed tightening cycle in the past 40 years. The rally in equity markets from October of last year through July of this year coincided with falling inflation, hopes of a timely reversal of Fed policy, and economic data that turned out to be more resilient than was generally anticipated. The rally was more powerful and longer lasting than we expected given the compelling alternative that fixed income securities provide today. If there is no economic hard landing, there is little reason for the Fed to reverse the rate increases of the past year, leaving fixed income yields quite attractive relative to the dividend and