About the Fed

Since this week will be mostly about the Fed, I can keep the written post very brief and to the point.

Here's from our internal Monday morning note:

9/16/2024

Nick T’s WSJ article effectively moved the needle to a 50 bps cut on Wednesday… Since the article, odds have spiked to 64% (in fed funds futures)... If that’s the case, the US central bank is clearly the most dovish among the majors, per the below:

Consumer Confidence, Small Biz Uncertainty, 50 bps Back on the Table, and THE Issue for the Fed (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

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.

Things Not Lining Up

Attention clients, this one's important to take in when you have a few minutes.

While I concede that Wall Street’s soft landing narrative – while, in my humble opinion, relying entirely on the Fed – has merit, there’s simply far too much uncertainty yet emerging from the data (not to mention where we are in the cycle, equity market valuations [very high), yada yada] to have us adding risk to client portfolios right here.

Case in point being the latest Fed Beige Book.

Here’s Peter Boockvar with the highlights:

The Bull Case

While our work sees a global macro setup fraught with risk-asset risk, today I want to consider what I see as some key points in the present bullish narrative; the narrative that says this is, in fact, an ideal moment to be adding to risk assets (read stocks).