Plainly, this’ll be a slow week for the macro-market crowd.
It’s Christmas, which means the entire Western world will stop for a day and a half to celebrate the Nativity, an event which almost certainly didn’t happen on December 25, and which absolutely wasn’t a “virgin birth.” (In vitro fertilization was hard to come by in those days. Then, as now, a lot of health plans didn’t cover it, and if Joseph and Mary were too poor to offer a lamb, it’s probably safe to say they didn’t have the wherewithal to cover IVF on an out-of-pocket basis.)
In America, Christmas is little more than an excuse to buy stuff, not that Americans need an excuse. I dare say Consumerism, proper noun, is a religion with more adherents than Christianity, and certainly more devout, practicing adherents.
US equities come into the high, holy holiday riding a two-week losing streak, although it doesn’t feel like it. Last week’s slippage (mitigated by a rally into the weekend), was attributable to the overtly hawkish spin the Fed put on December’s rate cut.
As the figure shows, the S&P’s two-day “FOMC performance” was among the worst since 2022, when Jerome Powell was busy ratcheting rates higher at a furious pace.
Thankfully, the final US inflation update of 2024 came in soft, allaying at least some concerns. Austan Goolsbee said he “hopes” the benign PCE price prints for November suggest successive warm reads covering the prior three months were just another “bump” on the road down to 2%.
Meaningful upward revisions to the Fed’s core PCE forecasts in the December SEP were widely viewed as an early referendum on the incoming administration’s trade and immigration policies, which some worry could rekindle inflation. Powell denied that, saying instead the revisions reflected the fact that the Fed’s core inflation forecast for year-end 2024 “kinda fell apart.” (Apparently, Powell would rather cop to forecasting ineptitude than risk irritating Donald Trump.)
Speaking of the incoming administration, we learned last week that it’s really comprised of just two people: “Individual Number One” and Elon Musk, who together tried to force a government shutdown over Christmas in the name of “the people.” It didn’t work out, but it almost did, and the mere fact that Trump and Musk were able to engineer so much chaos before they even take office says a lot, none of it good.
There’s a smattering of US macro data on the docket this week. Conference Board Confidence is due Monday (consensus expects a third straight monthly gain to 113 on the headline measure), new home sales are on deck for Tuesday’s shortened session and jobless claims will hit into the post-Christmas void on Thursday.
Oh, and as you gather with friends and family for gift competitions and gluttony, spare a thought for the hundreds of millions of people around the world who, for any number of reasons, aren’t able to revel in fortune, feast and felicity. Never forget: It’s not meritocracy, folks. It’s not providence either. It’s luck. Dumb luck.
Merry Christmas
Hosanna!
Absolutely ridiculous. The holiday, I mean. You celebrate the birth of God, who chose to come to the world as a poor man, whose parents couldn’t give birth to him in a decent place and who specifically said rich people mostly do not go to heaven. You celebrate by spending enough money to save hundreds of people from starvation on useless gifts. Luther would have said it comes straight from the devil, much like the prosperity gospel. I tried that thing of giving donations to charity as gifts once. Will not do it again, seeing the reaction once was enough. I guess it really shows what people really believe in, huh.
Merry Christmas and thank you for a year of learning and enjoyment.
Happy Winter Solstice, or as it is more commonly known “The Middle of Winter”.
I grew up going to a Congregational Church. I rarely find myself going to church, but this morning, circumstances found me in a beachside congregational church (not the one I attended while growing up). The capacity was 200 and the physical count of people present was 38.
At one point, the Abner Hale variety minister asked the children to step forward for a story. The only child present (maybe 5 years old) bravely walked to the front of the church. The minister asked her “how big is God”? She shrugged. He asked her if God is bigger than an elephant? She said “yes”. He asked her what else God was bigger than. She responded, “Taylor Swift”.
I swear I didn’t make this up! 🙂
“The tradition of Festivus begins with the airing of grievances. I got a lot of problems with you people! And now you’re gonna hear about it!” Frank Costanza