THAT WAS EASY:

Consider Exhibit 1. Since we featured the New York Fed's Global Supply Chain Pressure Index (GSCPI) last month, it has fallen further. The GSCPI mashes together various global shipping and transportation costs plus other supply chain indicators including delivery times, backlogs and inventory levels. June's reading was still elevated relative to the index's history, but it was noticeably down from December's peak. This doesn't mean disruptions won't flare again--see 2021 after 2020's spike--but absent further severe lockdowns (like China's) affecting global supply chains, companies appear to be working through bottlenecks.

That may not be exactly attention grabbing when far more colorful headlines abound, but this is what we find so interesting: When headlines ignore or dismiss good news, it is evidence of pervasive negative sentiment--what we call the "pessimism of disbelief"--which typically surrounds bear market troughs. Not that we are trying to pinpoint the low, as we think doing so is impossible, but we find the sentiment noteworthy all the same. It is what helps lay the groundwork for recovery as it makes positive surprise easier to attain.

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