Inside Markets — Pain Trade
Heavy money market inflows to start the year suggest investor caution into an expected avalanche of executive orders on immigration and tariffs following Monday’s inauguration.
Inside Markets — Mean Reversion
The recent choppy pullback in US equity markets reflects expectations for fewer Fed rate cuts in ’25 and higher bond yields amid an uncertain policy transition.
Inside Markets — Focus Still on Bond Yields
Ten-year yields broke to a new mini-cycle high (4.63%) last Tuesday and to a new 12-month high (4.71%) on Friday.
Inside Markets — Outlook for Bond Yields
The December Jobs Report due on Friday is a significant catalyst that could materially change the outlook for bond yields.
Inside Markets — January Inflows
The US equity market absorbed a good amount of supply in the last week of the year as quarter-end pension fund rebalancing (out of equities/into fixed income) likely amounted to ~$19B.
Inside Markets — Easy-to-Identify Risk
Higher bond yields remain the easy-to-identify risk for equity investors as we kick of 2025.
Inside Markets — January Effect
Light attendance/volumes and thin liquidity are impairing the signal quality of market internals, but we see early signs of a ‘January Effect’ rewarding last year’s laggards.
Inside Markets — Uncertainty Ahead
An uneven policy path, reluctant Fed and full SPX valuation (~21x forward estimates) has us looking to add equity exposure on pullbacks only.
Inside Markets — Volatility Spike
The CBOE Volatility Index (implied equity volatility) closed at elevated levels (27.62) yesterday.
Inside Markets — Higher Bond Yields – for now
The majority of SPX sectors have reached short-term oversold territory over the past two weeks.