The Market in Pictures, September 22

by | Sep 22, 2023 | Blog, Charts

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: The midpoint of the neutral policy rate hasn’t moved, but a few members have moved their targets higher

Source: Bloomberg as of September 2023

 

John Luke: and the market is again “catching up” to what Chairman Powell has repeatedly telling them what to expect

 

Source: Bianco as of 09.21.2023

 

Dave: It’s interesting to see how Fed “pauses” have replaced “pivots” in the lower rate environment of recent decades

 

Source: Strategas as of September 2023

 

Dave: As investors get used to the Fed “dot plots” showing a commitment to higher rates…

 

Source: Bianco as of 09.21.2023

 

Dave: it’s important to remember it wasn’t that long ago that ultra-low rates were expected by the FOMC members themselves

 

Source: Bianco as of 09.21.2023

 

John Luke: With a few glaring exceptions like 2021, Treasury yields have historically tracked fairly closely to Nominal GDP growth

 

Data as of September 2023

 

Beckham: and the Fed is now bumping up its projections of 2023 and 2024 Real GDP growth

 

Data as of September 2023

 

John Luke: but in the past, yield curve inversions have eventually led to recessions

 

Source: Bianco as of September 2023

 

Joseph: and the Conference Board’s Leading Economic Indicators (LEI) have fallen 17 months in a row

 

Data as of 09.21.2023

 

John Luke: CPI readings are still heavily driven by services inputs

 

Source: Strategas as of 09.19.2023

 

John Luke: muting the impact of recently rising oil prices on the “core” readings that seem to be closely followed by the Fed

 

Data as of September 2023

 

Brad: Those higher oil prices are leading to rising Q3 earnings estimates for energy stocks

 

Source: Strategas as of 09.20.2023

 

Brad: but the relatively small weighting of energy stocks means a muted impact on estimates for the S&P as a whole

 

Source: Strategas as of 09.20.2023

 

JD: Regular reminder that stocks and bonds often zig and zag together, especially in higher rate environments

 

Source: Verdad as of 09.11.2023

 

 

 

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Advisory services offered through Aptus Capital Advisors, LLC, a Registered Investment Adviser registered with the Securities and Exchange Commission. Registration does not imply a certain level or skill or training. More information about the advisor, its investment strategies and objectives, is included in the firm’s Form ADV Part 2, which can be obtained, at no charge, by calling (251) 517-7198.

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