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Wall Street is turning more bullish

right here. You can listen to an audio version of the newsletter by clicking the same link. New York CNN  —  It’s tough being a Wall Street bear these days. The S&P 500 index has climbed nearly 15% this year and clinched 30 record-high closes. Strong corporate earnings and the artificial intelligence helped drive stocks higher at the start of this year, despite a slew of hotter-than-expected inflation reports that fueled concerns the Federal Reserve would be slow to cut interest rates in 2024. Then, fresh data in May revealed last week that inflation is cooling again and getting closer to the Fed’s 2% target. The central bank at its June policy meeting held rates steady and penciled in one cut for 2024. After waffling over whether the Fed would ease monetary policy at all in 2024, traders are now betting on two to three cuts, according to the CME FedWatch Tool. The new backdrop of cooling inflation coupled with rate cuts on the horizon is prompting investors to up their bullish wagers. Goldman Sachs on Friday raised its year-end target for the benchmark index to 5,600 from 5,200, citing a strong outlook for corporate profits. That would be a 2.3% advance from Monday’s close. Evercore ISI raised its price target to 6,000 for the S&P 500, a reversal from its previous, more gloomy 4,750 target. That higher level would be a 9.6% jump from Monday’s close. “The backdrop of slowing inflation, a Fed intent on cutting rates and steady growth have supported Goldilocks,” wrote Julian Emanuel, a senior managing director at Evercore ISI, in a Sunday note. “The rally has room.” The market has also been distinguished by uncharacteristic calm. Stock sell-offs have been short and shallow. The S&P 500 has had its longest stretch of trading days without a 2% or more decline since February 2018, according to SoFi data as of June 12. While low volatility sounds like a positive, it’s not without danger. It suggests that investors are taking on more risk in their portfolios due to an overly optimistic view and could be caught flat-footed if the tide turns. There’s no shortage of risks that could unnerve markets in the coming months. Much of the S&P 500 index’s returns are tied to the mega-cap tech Magnificent Seven stocks, leaving the market dependent on just a handful of names to continue its monster run. Stocks could also wobble leading up to the US presidential election in November. Some investors warn that despite encouraging economic data, a recession could still be in the cards for 2024 or next year. Despite its more bullish baseline target, Goldman Sachs warned that the S&P 500 index could end the year at 4,800, a 12.3% drop from current levels, if economic growth data turns sour and markets price in higher odds of a recession. The strange economics of pig meat: Ham prices are down, but bacon’s up Shoppers in the meat aisle may have noticed something weird last month: Bacon prices are sizzling, but ham’s not so hot, reports my colleague Danielle Wiener-Bronner. Bacon is more expensive than it was a year ago, with prices up 6.9% from May 2023 to May of this year, according to inflation data from the Bureau of Labor Statistics. Pork chops were up too, by 4.6%. But ham prices were lower, falling 5.4% overall and dropping 6.3% when you exclude canned varieties. What gives? Econ buffs may remember that prices are set according to supply and demand. You’d expect any supply issues — like too many hogs, or too few — to cause prices of each of the items to move up or down, all in the same direction. The discrepancy, then, must be caused by differences on the demand side. And it is: Demand for domestic pork has grown in recent years outside of the US. But rising demand, plus the same or reduced supply, should push prices up, not down. So again, what gives? To understand you have to zoom out, looking at long-term retail pricing strategy and food price trends. Read more here. ‘They’re treating us like we’re spies.’ Florida property ban has Chinese citizens fuming After his employer implemented a return-to-office policy last year, Jin Bian decided to cut down his one-hour commute time by purchasing a house closer to the office in Tampa, Florida. Then, he was told the purchase might get him prison time, reports my colleague Samantha Delouya. “That was really shocking to me. It’s just purchasing property,” Bian, who is originally from Nanjing, China, said. “Once I learned that, I didn’t even bother to look anymore.” Bian, a 31-year-old software engineer who has lived in the US for 12 years, is a recipient of an H-1B visa, which allows companies to employ foreign workers. For nearly a year, however, it has been a crime for him to purchase a home in Florida after the state’s governor, Ron DeSantis, signed a law restricting Chinese nationals without US green cards from purchasing property in the state. Bian and other Florida residents told CNN that the rules have fostered uneasiness and confusion among ethnic Chinese people living in the state. Some say the law has damaged their businesses, while others say they are considering abandoning Florida altogether. And the law underscores the heightened tensions between the two biggest economies in the world in a US presidential election year. Bian said that lately, he had begun reconsidering his life in Florida. He isn’t alone. Ever since Florida Senate Bill 264 went into effect on July 1, 2023, Chinese citizens without green cards face a felony charge and possible prison time if they purchase property in the state. Sellers and real estate agents can also be found liable under the law. Read more here.