Who Called The ‘Everything Rally’?
What a difference five weeks makes.
The one-two-three punch of a conciliatory nod to the term premium in last month's Treasury refunding (i.e., smaller-than-expected coupon increases), softer US macro data (e.g., the last jobs report and CPI) and Chris Waller's sea change moment (i.e., de facto confirmation that the Fed will consider insurance cuts in the first half of 2024 assuming inflation continues to recede) prompted an astounding about-face across assets last month.
When the dust settled
I continue to maintain that this single chart explains what is going on in markets.
https://fred.stlouisfed.org/series/W255RC1Q027SBEA
This should be impossible and yet here it is, the lowest interest and misc payments on assets since 1978. Where is all that extra operational cash going? Everywhere.
The chart data ends in July?
Updated: Nov 29, 2023
Thanks are in order. While I know you don’t give investment advice, and a well-informed investor reads multiple sources, the October 30 article was a catalyst for me to move substantial cash off the sidelines. Thank you for the regular insight.
Tony Montana more famous than Michael corleone?
Unfortunately. Americans like a cartoon.