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 debt ceiling remains a story for markets, here’s Morgan Stanley’s walkthrough of prior showdowns


Source: Morgan Stanley as of 05.15.2023


John Luke: this occurring at a time when the government’s interest expense is exploding


Data as of 05.12.2023


Dave: as a period of relentless liquidity from the Federal Reserve into the economy is ending


Source: Strategas as of 05.12.2023


John Luke: We’re seeing government economic data surprise to the upside after a rough stretch


Data as of 05.17.2023


Dave: yet bankruptcies are climbing


Source: Strategas as of 05.16.2023


John Luke: and the Philly Fed is plunging, seeming to signal a coming recession


Data as of 05.17.2023


John Luke: Tightening lending standards at banks have historically led to widening credit spreads, again summarizing the disconnect between business sentiment and markets


Data as of 05.16.2023


Beckham: Speaking of sentiment, it’s funny to see such a spike in public belief in gold as an investment


Data as of 05.12.2023


Dave: but flows drive performance (and vice versa), and we’re seeing a real flip from what attracted money in 2022


Source: Strategas as of 05.15.2023


Dave: Stocks are not crazy expensive once you look past the glamour names that trade at nosebleed levels


Source: Raymond James as of 05.15.2023


Brad: as evidenced by the extensive discount at which small-cap stocks are trading


Data as of April 2023


Brad: maybe the macro setup finally falls into place for a reversal of fortunes?


Data as of April 2023


Dave: Historically, the level of inflation has also played a role in how the S&P has traded following the end of rate hike cycles


Data as of May 2023


John Luke: and belief in the Fed’s success against inflation will also dictate how the rates market plays out


Data as of May 2023


Dave: Since it’s hard to find fundamental justification for a continuation of the S&P’s bounce, here’s one anecdote in favor of stocks


Source: Strategas as of 05.15.2023











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