The Case for Optimism is Building. Here Are 14 Data Points.

Avory Team
Apr 3
7 min read

Last week we wrote that we believed peak uncertainty was likely behind us. This week's data reinforces that view.

The most telling signal came on Tuesday, when markets got a whiff of ceasefire progress. In a single session, the growth and economically sensitive parts of the market surged 3 to 5%. Communication Services, Consumer Discretionary, Tech, and Financials all ripped higher. Meanwhile, Energy gave back gains. That rotation pattern is not random. It is the market telling you what it expects to happen when the conflict eases.

This is exactly the kind of day that makes timing the market so costly. The data on missing the best days in markets is clear: those best days almost always come right after the worst days. They cluster in the most uncomfortable moments. If you are sitting on the sidelines waiting for clarity, you miss the move. And missing just a handful of those days destroys long term returns. The probabilities favor the optimist who stays the course, not the pessimist who tries to trade every headline. That’s the stats.

On the inflation front, real time data continues to paint a more constructive picture. Yes, energy prices will push inflation readings higher over the next several months. That is mechanical and expected. But the real core of inflation is housing, and shelter is flat to falling. CPI shelter is at 3.0% and decelerating. Real time rent data from Zillow and Apartment List is flat to negative. The biggest component of the inflation basket is moving in the right direction. Meanwhile, Truflation's real time CPI shows that the entire recent jump was driven by gasoline. Strip that out and the underlying trend remains disinflationary. Google Trends data on gas price searches tells an interesting story too. You will see that below.

The labor market is bending but not breaking. ADP beat expectations at 62K. Challenger layoffs dropped 78% year over year. Job openings crossed above their 3 month moving average. The consumer is still spending. Small businesses posted gains in March.

And the forward curve is doing the work for us. The oil futures market is pricing WTI back to $72 by December, near pre war levels. The market is not pricing a permanent disruption. It is pricing a shock that fades. Could be longer for higher, sure but not now.

When you put it all together, the case for staying invested is stronger than the case for selling into fear. The fundamental economy is healthy. The inflation impulse is energy driven and temporary. The technical setup is coiled for a move higher. And the sectors with the strongest earnings growth are the ones most discounted by the war.

We continue to believe the direction is toward resolution, and that the data supports being positioned for what comes next.

This Week’s Data

1. Missing the best days destroys returns.

Over a 20 year period, the S&P returned +7.8% annualized. Miss the 10 best days and it drops to +4.1%. Miss the top 40 days and you are negative at -2.3%. The best days tend to cluster around the worst moments. Exactly the kind of moments we are living through right now. Sitting on the sidelines has a measurable cost unless you are Oracle from the Matrix.

2. The best time to invest is when it feels the worst.

This data was fascinating. Every major crisis low in the past century produced extraordinary 5-year forward returns.

Great Depression: +367%

Severe Recession (1982) +267%

Aggressive Fed Tightening (1994) +251%.

Great Recession (2009): +178%

Just more evidence that market turbulence is just that, turbulence that’s all.

3. When ceasefire hopes emerged, growth sectors ripped.

In just four trading days (March 27 to April 1),

Communication Services gained +3.9%

Consumer Discretionary +3.9%, and

Tech +3.8%.

Meanwhile, Energy collapsed -5.7%.

This is what the rotation looks like when the market begins to price in de-escalation. Financials, Industrials, Materials… everything cyclical moved. The sectors that got punished most during the war are the ones that snap back fastest. And it happens quickly. If you wait for confirmation, you miss it. Just a reminder.

4. The futures market is pricing oil back to $72 by December.

More data. The WTI forward curve tells a simple story. May at $111, June at $97, and a steady decline to $72 by December, which is near pre-war levels of $68. This is steep backwardation. The market does not expect a permanent disruption. It expects the shock to fade, consistent with the incentive structure we outlined above. By Q4, the oil premium is largely gone in futures pricing.

Yes this moves and we are tracking it. So will update.

5. Housing is flat. That is the most important inflation signal.

Everyone is focused on oil-driven inflation. But shelter, the single largest component of CPI at ~40% is running at 3.0% and falling. Real-time rent data from Zillow shows 2% growth. Apartment List shows -1.4%. Truflation's real-time CPI jumped to 1.47% but was driven entirely by gasoline. Strip out energy and the underlying disinflationary trend is intact. Housing is the medium-term signal. Energy is the noise for now.

6. Gas price anxiety is nowhere near 2022 levels.

This one is pretty cool. Google search interest for "gas prices" peaked at 36 in early March and is already declining to 21. During the Russia-Ukraine crisis in March 2022, the same metric hit 100. Consumer anxiety about fuel costs is roughly one-third of what it was four years ago. People are paying more at the pump, but they are not panicking. Yet…

7. Small-cap short interest is the highest in 12 years.

Russell 2000 short interest as a percentage of float has climbed to 7.2%, the highest since 2014. The 12-year median is 5.2%. This is extreme positioning. When the catalysts arrive, ceasefire progress, a strong jobs report, better-than-expected earnings, forced covering in small caps will create a violent rally. The shorts are already in. The incremental seller is gone. This is a coiled spring. Let’s see.

8. April is historically the second-best month for stocks.

New month who dis? Over 51 years of data, April has produced the second-highest cumulative return of any calendar month, behind only November. The S&P 500 is currently -4.9% YTD versus a historical average of +2.8% through March. Seasonality alone does not override an active war. But it adds to the weight of evidence. Entering the year's strongest seasonal window with this much pessimism already priced in is not a bearish setup.

9. Small businesses posted gains in March.

The Fiserv Small Business Index showed both month over month and year over year sales gains in March. ADP confirmed: private payrolls added 62K jobs, beating the 40K estimate, driven by small companies for the second straight month. Redbook retail is at 6.7% YoY and accelerating. The consumer engine that powers 44% of economic activity is still running.

10. The hardest-hit sectors have the strongest earnings growth.

Q1 2026 FactSet revenue estimates: Technology at 27.4%. Communication Services at 12.7%. Financials at 10.0%. These are the three most punished sectors during the war and they have the three strongest fundamental growth profiles. Consumer Discretionary is also strong at roughly 8.5%. Energy is last at 1.6% but has seen strong upward revisions for obvious reasons. The S&P 500 as a whole is projected at 9.7% revenue growth. So fundamentally market is pretty healthy.

11. ADP beat. Private employers added 62K jobs.

The ADP National Employment Report showed +62K private sector jobs in March, above the 40K consensus estimate. Education and health services drove the gains (+58K).

Interestingly, small companies (1-19 employees) led for the second consecutive month. The labor market is not collapsing. It is a slow bend, not breaking. And with inflation components outside of energy remaining soft, the policy balance should tilt toward supporting employment. That’s our take atleast.

12. Layoff announcements dropped 78% from last year.

Challenger reported 60,620 announced job cuts in March, well below the 275,240 recorded in March 2025. That is a 78% Y/Y decline. February was similar at -72% Y/Y. March 2025 was the peak of those DOGE-related federal cuts and tariff-driven layoffs. That wave has passed. Something we spoke about in our annual report heading into the year. The underlying trend in layoff activity is normalizing.

13. Earnings growth remains remarkably strong.

I mentioned this at the beginning, but here’s this… S&P 500 Q1 2026 consensus: 13.3% earnings growth and 9.7% revenue growth. Double digit earnings growth despite a war, an oil shock, and rate uncertainty. This is not a recession earnings profile. Tech leads at 27% revenue growth. Energy revisions are sharply higher. But even ex-energy, the earnings picture is constructive.

14. The agent economy is accelerating.

I obviously have to add something around AI.

AI coding agents. Claude Code, Cursor, OpenAI's Codex, are emerging as the first clear winners in agent powered applications. The Agent Building Activity Index rose 51% M/M in March, the strongest signal of enterprise AI adoption we have tracked. OpenClaw downloads surged amid China's push for AI-driven business workflows.

Looking Ahead

April 10: March CPI: The first reading fully capturing the oil shock. Markets are braced for a hot number. The question is whether core ex-shelter confirms the disinflationary trend underneath.
Iran Conflict: Both sides have signaled willingness to negotiate. The gap between signaling and execution is where the noise is. But every week that passes without escalation increases the probability of de-escalation.
Q1 Earnings Season: Begins mid-April. Guidance will matter more than results forsure. Companies that signal resilience through the crisis will be rewarded disproportionately given current positioning. Plus AI talk.

That’s all! Peak uncertainty may already be behind us but we are watching. Keep watching the data with us.

About Avory & Co.

Investing where the world is headed.

Avory specializes in high-conviction equity strategies, emphasizing Secular Growth and Transformation Stories driven by exceptional teams. Data guides decisions. We cater to high net worth investors, family offices, and institutional investors. Note: This information doesn't constitute a recommendation to buy or sell any mentioned securities. Avory is based in Miami, Florida with clients all across the globe.

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Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.