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: Between the Fed Chair and the jobs report, the market’s expectations of another 50 bps cut have gone from a tossup to “not happening”
Source: CME FedWatch Tool
JD: but the global trend of central bank easing is well underway
Data as of 09.27.2024
Beckham: The jobs report was another push away from summer recession fears
Data as of 10.02.2024
John Luke: with the consumer a key part of avoiding a real economic downturn
Data as of September 2024
John Luke: and supported by a persistently high level of saving
Data as of September 2024
Arch: Housing is a huge piece of most consumer balance sheets, especially as you go down the wealth scale
Beckham: and they’re benefitting from their ability to refinance mortgages in the 2020-2021 low rate window
Data as of September 2024
Joseph: which is a prime reason why it would seemingly take a further drop in mortgage rates to generate new mortgage activity
Brad: We’re heading into a seasonally strong period for stocks
John Luke: and they’ve historically responded well to rate-cutting cycles that have avoided recessions
Dave: Q3 earnings estimates have retreated in recent weeks as investors began worrying about the economy
Data as of 10.02.2024
Brad: leading to a flattish set of comparisons in Q3 relative to Q2
Data as of 10.02.2024
Brett: to an extent, this matches the history of earnings tracking along with interest rate cycles
Source: Societe Generale as of Sept 2024
John Luke: but like homeowners, large US companies took advantage of historically low rates to at least reduce the interest expense line item
Brad: Good reminder that investor mood changes often but growth is the consistent driver of what markets can ultimately deliver
Dave: and a reminder that the election winner has little impact on the long-term drivers of wealth
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