Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and the way they fit the unfolding puzzle of evidence:
Dave: The long pause is over, stocks enjoyed it
Source: Strategas as of 09.16.2024
John Luke: the range of future forecasts for the Fed Funds rate is quite wide
Source: Bloomberg as of 09.18.2024
Beckham: and while this meeting had a rare “Powell Fed” dissenter
Data as of 09.17.2024
Brett: the generally assumed path of short-term rates resembles a recession path more than a soft landing
Source: Apollo as of 09.19.2024
John Luke: While the rates market has been uncertain as to the terminal rate for this cycle’s Fed Funds rate
Source: Apollo as of 09.19 2024
Brad: there’s not a ton of evidence suggesting an imminent recession
Source: Sevens Report as of 09.19.2024
John Luke: and the cuts taking place across the globe should help cushion incoming effects from other economies
Data as of 09.13.2024
Brad: In the 1995 soft landing cycle, manufacturing immediately responded to rate cuts
Source: Strategas as of 09.17.2024
Arch: but the most closely-watched area in this cycle will likely be homebuying
Source: Bianco as of 09.18.2024
John Luke: While mortgage rates have come down from the 2023 highs
Data as of 09.16.2024
Joseph: there are still many homeowners in love with their existing mortgages of 2021 vintage
Data as of 09.16.2024
Beckham: and the general level of prices has stayed close to the highs in most parts of the country
Source: Sandbox Daily as of 09.16.2024
Dave: Looking at past instances, stocks have had a solid next 12 months when the Fed has cut rates near all-time equity highs
Brian: but if that pattern repeats itself, it won’t be because of the “cash on the sidelines”; that measure has been remarkably stable over time
Source: Aptus via FRED as of 09.13.2024
Dave: Heading into the end of Q3, sales forecasts have failed to accelerate
Source: Strategas as of 09.17.2024
John Luke: but earnings have been supported by the profit margin recovery and expansion of recent years
Data as of August 2024
Brad: We’re still waiting for the broader market to grab the earnings baton from the megacap leaders
Source: Goldman Sachs as of 09.06.2024
Brett: with energy the leading drag on overall results
Data as of 09.17.2024
Brian: Small caps have historically performed well after rate-cutting cycles start
Data as of August 2024
Brad: and with their valuations as low as they’ve been relative to large caps, there’s no excuse for failing to make up some ground
Source: Strategas as of 09.18.2024
John Luke: Large US corporations used the zero-interest rate era to dramatically improve their financial footing
Data as of August 2024
John Luke: can’t say the same for the US government
Source: @LukeGromen as of August 2024
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Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. The information contained herein should not be considered a recommendation to purchase or sell any particular security. Forward-looking statements cannot be guaranteed.
Projections or other forward-looking statements regarding future financial performance of markets are only predictions and actual events or results may differ materially.
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