Has today's US inflation data changed the picture for markets into year end?
A few thoughts. Equities more than front ran the adjustment in real rates we're seeing today. Valuations are still rich. And I'm no expert but when the prices of things most SP500 firms sell (goods) are declining while the cost of their main input (wages) is still increasing, I don't get optimistic about margins, growth or EPS.
I'll be alone in this, but I was more curious to the redbook report than CPI today. Now 3% yoy, weak and down from recent 5% readings. Cautious comments out of HD. End of day, more and more consumers are tapped out (even with health insurance supposedly down 30%+ YoY).
It's all about time horizons. If one thinks there are more ppl to join the EOY party, then by all means, Yolo some calls with the rest of the gamblers. Best wishes in getting out in time, once ppl question just how and why inflation is slowing (and where it's not).
Thank you so much for updating your thought processes and positioning! Today's note, like the previous ones, is very helpful. A quick question: do you see U.S. REITs as attractive at least for a short term trade? With the Fed on pause and a lower 10-year yield, do you think today's rally in REITs has legs?
Also if you believe in chart analysis, S&P500 stocks above 200-day is putting in an inverse head & shoulders, along with RSP & the Russell. So maybe breadth will improve & a rally wont be reliant on the MAG7 as has been the case all year.
Great take, thank you Florian! Appreciate
Thanks. Appreciate your timely post.
And congrats on your long Russell 2000. It’s been a long time since we’ve seen that group up over 5% in one day.