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: Tough to see how inflation can get down to the Fed’s stated 2% target


Source: Strategas


Brad: which would make it tough to get valuation support for already-expensive stocks


Source: Strategas as of 05.09.2023


Dave: Net interest costs are rising significantly for the federal government


Source: Strategas as of 05.09.2023


Dave: as low rate Treasuries mature and get replaced by higher borrowing costs


Source: Strategas as of 05.09.2023


Brad: leading to a significant expense for the federal budget


Source: Strategas as of 05.09.2023


John Luke: The end of last 4 hiking cycles have ushered in a healthy period for both stocks and bonds


Data as of 05.08.2023


John Luke: but recent market optimism regarding coming rate cuts seems misguided


Source: Goldman Sachs as of 05.08.2023


Dave: Earnings have been widely reported as “better than expected” but much of that is from reduced expectations coming in


Source: Morgan Stanley as of 05.09.2023


Joseph: with hopes that the earnings trough is behind us seemingly at odds with history


Source: TS Lombard as of 05.09.2023


Brad: and even the most optimistic scenarios not exactly inspiring for stocks


Source: Sevens Report


John Luke: Correlation regimes can last a long time, and the positive correlation b/w stocks and bonds is still young compared to the prior regime


Source: 3 Fourteen Research as of 05.06.2023


John Luke: which could lead to continued ineffectiveness for bonds as a hedge for stocks


Source: 3 Fourteen Research as of 05.08.2023





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