Wednesday, November 29, 2023

What Election Year Stimulus Portends, And Not a Great Short Term Look From Yields & the Dollar (video)

Bloomberg's Cameron Crise this morning speaks to what has stocks green at the open:

"When you are a bull, everything looks like a red cape, which kind of explains how the market is likely to interpret this morning’s data. The salient features were a downward revision to the Q3 core inflation index, a downward revision to last quarter’s household spending, and downside surprises to October inventory data (which should produce a  downgrade to current-quarter growth estimates.) That all casts a dovish hue on the policy backdrop..."

All of which denotes a slowing economy, which of course is to be expected if the 2024 recession narrative is to play out... In the meantime, as is typical at this stage, confirmation of such, is, ironically, bullish for stocks. 

And of course this -- the Goldilocks narrative -- from Fed Governor Waller yesterday is absolute music to the market's ears:

"If the decline in inflation continues "for several more months ... three months, four months, five months ... we could start lowering the policy rate just because inflation is lower," he said. "It has nothing to do with trying to save the economy. It is consistent with every policy rule. There is no reason to say we will keep it really high."

Per this morning's video (recorded yesterday), while you have to respect/anticipate the positive seasonality right here, the technicals and sentiment aren't quite what they were heading into the November rally. 

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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

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