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: Before the FOMC meeting, markets took comfort that Treasury borrowing needs wouldn’t expand in the first half of 2024
Data as of January 2024
Beckham: and even a sizable reduction in expectations for the use of short-term bills
Source: Reflexivity as of 01.31.2024
John Luke: The jobs report shocked the market, implying that the trough of this economic cycle might be behind us
Data as of 02.02.2024
Brett: this despite a restrictive environment for real (nominal minus inflation) rate policy
Source: WSJ as of 01.30.2024
John Luke: yet significantly reducing the odds of a rate cut at the FOMC’s March meeting
Data as of 02.02.2024
Dave: On the earnings front, reports are trickling in and technology is the only area where earnings estimates have moved higher since October
Data as of 01.29.2024
Dave: this is partly due to maintaining high expectations for profit margins relative to other sectors
Source: Strategas as of 01.30.2024
Brian: and a huge difference between stocks classified as growth vs. those classified as value
John Luke: The divergence between the largest stocks and even just “large” stocks continues to be historically extreme
Source: JPM as of January 2024
John Luke: but you can still make the case that company fundamentals are a justifiable driver of this massive divergence
Data as of 01.30.2024
Joseph: Despite more conservative capital allocation by energy companies, production has reached all-time highs
Data as of December 2023
Joseph: putting the US in a rare position of being a net exporter of crude
Data as of December 2023
Brad: Most observers are now in agreement that consumers holding low-rate debt has reduced the economic impact of the Fed’s rate hikes
Source: Apollo as of December 2023
Brad: but that doesn’t mean there wouldn’t be increased housing activity if mortgage rates move lower
Data as of December 2023
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