Inside Markets — Tactically Bearish
This morning’s release of US core PCE and Eurozone CPI fail to shift an emerging stagflation narrative.
Inside Markets — Stagflation Theme
This morning’s release of US core PCE and Eurozone CPI fail to shift an emerging stagflation narrative.
Inside Markets — Higher Yields
The move in yields has been linked to the Fed’s higher-for-longer message, an extension of the rally in crude prices and increased Treasury supply.
Inside Markets — Volatility Concern
The SPX is down ~7% from its YTD high on July 31 as 10-year Treasury yields have risen from 3.96% to a cycle high of 4.54% yesterday.
Inside Markets — Break Down
Investment Grade, High Yield and Emerging Markets CDX credit spreads continue to widen as a possible sign of emerging credit stress.
Inside Markets — Key Support
Today’s curve steepening takes the 5/10 yield spread to -8bp with technical resistance at -7bp. A break above -7bp would be an incremental positive development for rates markets with an eventual break above +18bp signaling an imminent (weeks away) Fed pivot.
Inside Markets — Cyclical Stocks
US consumer strength has been a major reason to doubt near-term recession risk all year, but some cracks are beginning to show.
Inside Markets — Credibility Problem
Today’s risk-off trade follows yesterday’s Fed meeting and updated dot plot that removed 50bp of easing expectations in ’24.
Inside Markets — Updated Dot Plot
Almost all developed markets have been forming bearish distribution patterns over the last two months and the small-cap Russell 2000 (RTY) has been one of the weaker major US indices during this period.
Inside Markets — Equity Multiples
It’s otherwise quiet into tomorrow’s Fed decision with OIS markets still pricing in a pause, while the probability for another ’23 hike (November 1 or December 13) increased to 45% from 40% overnight.