Rethinking The Repricing

Market pricing for the Fed trajectory tends to overshoot. It was clear in January that rate-cut pricing for 2024 was too aggressive with more than half a dozen quarter-point reductions in the forward curve. At one juncture, a March cut was almost fully priced. By the time the May FOMC meeting rolled around this week, all but 29bps of what, at the extremes, was nearly 175bps of rate-cut premium, had evaporated into a succession of warm data, a big repricing over a fairly compressed window. The

Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today for as little as $7/month

View subscription options

Or try one month for FREE with a trial plan

Already have an account? log in

2 thoughts on “Rethinking The Repricing”

1Q earnings winding down with 72% of the S&P 500 having reported.

All following percentages are of reporters, market cap weighted. 71% beat 1Q cons rev, 88% beat 1Q cons EPS, 36% saw 2Q cons rev go up, 48% saw 2Q cons EPS go up, average stock reaction +1.0%. Sectors where >50% saw 2Q cons go up: CommSrvcs, Energy, Financials (rev only), InfoTech (EPS only).

At index level, for S&P500 in L2W 2Q cons sales and EPS are -10bp, 2004 cons rev -10bp EPS +40bp. Looking at sector level isn’t too notable.

Was hoping for something notable, but nope. Back to the company-specific salt mines, I guess.