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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