Dave: Tuesday’s reaction to the tame CPI report was the ripper of the year


Source: Strategas as of 11.14.2023


John Luke: as markets have more confidence that the Fed will move rates lower in the first half of 2024


Source: CME Fed Watch Tool as of 11.14.2023


John Luke: BUT, we’ve seen this movie before in the past 18 months


Data as of 11.15.2023


Brett: and markets are still reluctant to price in imminent rate cuts


Data as of 11.15.2023


John Luke: Services is the component keeping inflation above the Fed’s comfort level


Data as of October 2023


John Luke: and specifically shelter as the one area comprising the bulk of the services impact


Data as of October 2023


Joseph: and you can really see the significant build-up in housing costs over the past few years


Source: Bianco as of October 2023


Brad: Reminder that stock-bond correlations are not a number you can just plug into planning software, they float in a wide range depending on inflation


Source: Strategas as of October 2023


John Luke: and right now, we’re in the inflation range where correlation is clearly positive


Data as of October 2023


John Luke: Even with recent contractions, central banks around the world are still sitting on large balance sheet debts


Data as of 11.15.2023


John Luke: and the US government fiscal picture is not exactly helping the Treasury’s ability to reduce borrowing needs


Source: Stifel as of October 2023


John Luke: despite that picture on the government side, investors aren’t overly concerned about the repayment ability of US corporations


 Source: Bloomberg as of 11.13.2023


Beckham: On the earnings front, consensus estimates are factoring in a serious boost from profit margins


Data as of 11.13.2023


Dave: but we’re seeing incremental cuts in forward earnings estimates as we go through the Q3 earnings season



John Luke: It seems like megacap tech has been the consensus trade forever, but it’s actually been hot and cold based on recent performance


Data as of 11.13.2023


John Luke: and the sentiment towards the future course of bonds has completely flipped this year as investors think we’ve seen the highs of this cycle


Source: Market Ear as of 11.13.2023


Dave: Looking ahead to an election year, as we’ve historically seen decent performance with the current electoral makeup


Data as of October 2023


Dave: and the weak election years have historically come when there is no incumbent in office to promote a re-election agenda


 Source: Strategas as of 11.13.2023






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