November's rally was among the top 10 best months for the S&P 500. The rally in risk assets was driven by two important forces: the narrative that the Fed would cut aggressively in 2024 and increasing liquidity from the New York Fed's Reserve Repo Facility. This is leading to easing financial conditions.
Today's topics include inflation-adjusted pandemic savings, the housing market's effect on consumer spending, owning vs. renting, refilling the strategic petroleum reserve, the labor market marches to its own beat, small businesses feeling the squeeze, and doubting CBDCs' usefulness
Today's topics include what a difference a week makes for FOMC expectations, the last mile in the fight against inflation, bonds' great month, who will buy all this Treasury supply?, money market fund inflows, an optimistic retail crowd jumps back into stocks, and corporate profit margins
The bond market had one of its best months on record in November.
Today's topics include are investors correct about a Fed pivot?, or are rate cuts wishful thinking?, El-Erian on the November rally, consumer spending slows, bots trading oil, crowded trade, rise in real wages, European inflation falling faster than expected, the treacherous path to 2%, the importance of short sellers, and retail traders secure gains
Bond markets staged a big rally in November, led by long-duration assets. The current perception driving the rally is that the Fed is done hiking, inflation is beaten, and a recession is coming. We argue this might be an overly bullish stance.
Some view the massive influx of cash into money market funds as dry powder waiting to be deployed in the stock market. It is worth noting the outflows from bank deposit accounts have outpaced money market inflows since the Fed started hiking in March 2022.
Today's topics include bond market optimism, Fed tightening, is passive investing the problem or scapegoat?, Fedspeak, relentless focus on Mag7, the massive growth of money market funds in 2023, on housing, an economic advantage, dollar falls, criticisms of Chinese financial firms continue, and the power of AI in R&D