This recent rally feels different. While the S & P 500 rose 11% during two weeks in March and 18% from mid-June to mid-August, investors bailed out and tripped the prior lows for the year. This current climb of roughly 10% from the Oct. 12 close at 3,577.03 has some meaningful catalyst compared to the bales of wishful thinking that characterized the previous buying sprees. It wasn’t clear, way back in March, that Federal Reserve Chair Jerome Powell would turn from a soft-spoken, well-mannered, Ivy League banker into a tyrannical interest-hiking, inflation-slaying dragon-hawk. It wasn’t obvious that Americans still had huge amounts of buying power that would continue to drive price levels higher. Inflation through the spring and summer remained hot as the concrete at the Bellagio pool in July and with each passing 0.75 percentage point Fed rate increase, market participants grew more bearish. The rallies seemed to have been sparked by the belief that prices were cooling. Whether it was lumber, corn, copper or used cars, the moderations were either fleeting or more than offset by higher prices in other areas. Investors grew increasingly bearish with each elevated consumer price index report, shedding shares and risk while driving the S & P 500 down 25.4% from the peak on Jan. 3 to 3,577.03 on Oct. 12. The Nasdaq fell about 28% between Jan. 3 and Nov. 11, but that generously hides the fact that 214 stocks with market caps over $3 billion were down over 50% from their twelve-month high. At what point does “oversold” become a relevant term to describe a market? One definition might be when there is a fundamental shift in some critical measurements of the most negative weights pressuring stock prices. One oversold observation I wrote about suggested that lower consensus guidance following this year’s third-quarter earnings caused more extreme stock action than usual. Stocks whose analysts lowered consensus earnings estimates this past quarter fell over twice the average of the last four years. Likewise, positive consensus changes corresponded with a more dramatic stock response than usual. Finally, some good news arrived on Nov. 10 when we heard that CPI for October was up 7.7% from the prior year. The S & P soared 5.5% that day, and the Nasdaq vaulted over 7%. With a response like that, one can only speculate on the reaction to a CPI increase of merely 6.5%. Also, we saw a lower producer price index number , announcements of layoffs at Meta and Amazon , and an activist’s open letter to the management of Alphabet about cost cutting. These are all real data points taking place in the real world. Layoffs, which are never suitable for the people on the losing side, are deflationary since they reduce buying power. We will never get to the Fed’s target rate of 2% inflation with the current 3.7% unemployment rate. Speaking of targets, the weak Target quarter suggests that Americans are pulling back on consumption. The Fed would view that as good news, but both Walmart’s results and the stronger than expected 1.3% U.S. retail sales growth in October suggested the opposite picture. Target’s shoppers may be an anomaly, its product offerings are out of favor, or that countervailing income and demographic trends are hurting TGT alone. Still, over $100 billion in annual sales must be considered more of a bellwether rather than an exception. A few days later, both Macy’s and Kohl’s reported results as well. Therefore, we are walking a tightrope. The evidence is mounting that inflation is falling, which is what market players have craved all year. However, we love earnings, and those companies that depend on certain types of consumer spending will suffer as the economy softens. We don’t know how extensively companies over-inventoried workers as they scrambled to fill spots during the pandemic. What would be ideal is if headcount at bloated firms can decline without damaging those that are lean. This rally is different, even if it moves sideways or falters for a while because its genesis is based on real facts and figures. Let’s keep our eyes on the employment numbers, consumer spending, and other pieces of the puzzle to determine whether the rally is sustainable. Karen Firestone is chairperson, CEO and co-founder of Aureus Asset Management, an investment firm dedicated to providing contemporary asset management to families, individuals and institutions.