The Market in Pictures, December 15

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:

John Luke: The story of this week was the Fed, and how far out in front the market is in terms of rate cuts

Source: Bianco as of 12.13.2023

John Luke: and the market must be anticipating some immaculate disinflation to unfold in a hurry

Data as of Dec 2023

John Luke: which would require a string of 0% monthly readings to get to the stated 2% target

Data as of Dec 2023

Brian: For the first time in awhile, consumer expectations for inflation are actually falling

Data as of 12.11.2023

John Luke: likely a result of gas prices pulling the “goods” piece of inflation falling back into flat range

Data as of Dec 2023

John Luke: with shelter currently the stickiest part of the inflation equation

Data as of Dec 2023

John Luke: The US Treasury Department is issuing a ton of debt to cover higher government spending

WSJ as of 12.10.2023

Joseph: mostly with short-term T-bills in hopes of longer-term rates falling back down

Source: @BradSetser as of Nov 2023

Brian: meanwhile, the inverted curve means those usually cheaper T-bills are still yielding more than longer-term bonds

Source: Aptus via FRED as of Dec 2023

Brett: Wild turn of events, this is the fastest turn in at least 4 decades for the Russell 2000 to go from a 52-week low to a 52-wk high

Source: Bespoke as of 12.14.2023

Dave: and seasonal tendencies have probably played a role in supporting the move

Source: Goldman Sachs as of 12.06.2023

Dave: The move in rates has driven the market at times, but there are a handful of groups that have thrived no matter the rate environment

Source: Strategas as of 12.11.2023

Beckham: and as a whole, S&P 500 companies are generating cash at a high rate

Data as of November 2023

Mark: The market for options grew throughout the 2010s, but has really exploded in the past few years

Data as of November 2023

Brad: and the activity in shorter-term options has become a larger share of the growing activity

Data as of November 2023

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