September 28, 2022
Market Performance (YTD)
Source: YCharts
Disclaimer: Past performance is no guarantee of future performance
The Fed:
*Raises rates by three-quarters of a point to 3-3.25%
*Projects 4.4% rates at the end of 2022, suggesting a 75 and a 50
*Rates climb to 4.6% next year (up from 3.8%)
*Sees unemployment rising to 4.4% next yearThis is a central bank in full inflation-fighting mode.
— Jeanna Smialek (@jeannasmialek) September 21, 2022
Shorter Chair Powell
-Want sufficiently restrictive rates
-Maintain that stance for some time
-A ways to go before we get there
-Want to avoid prematurely easing
-Committed to getting 2% inflation
-We will keep at it until job is done
-See Jackson Hole speech for more— Jonathan Ferro (@FerroTV) September 21, 2022
Leading economic indicators update through August, now -1.02% YoY. @Conferenceboard: "Economic activity will continue slowing more broadly throughout the US economy and is likely to contract. The Conference Board projects a recession in the coming quarters.” @FactSet chart pic.twitter.com/UDEX5YDkn8
— Matthew Miskin, CFA (@matthew_miskin) September 23, 2022
Heading into the Fed meeting, 64% of Treasury yield curves are inverted, a record for this cycle. High inversion breadth has been consistent with a weakening economy and an eventual recession. @NDR_Research pic.twitter.com/M4uAOG4FUq
— Rob Anderson (@robanderson_stl) September 21, 2022
🇺🇸 Federal Reserve tightening cycles pic.twitter.com/HHGX01nRhm
— Gregory Daco (@GregDaco) September 22, 2022
The rolling 5-day moves in 5-year UK gilts has been the largest in data going back to 1979, showing the magnitude of the recent moves, h/t Jim Reid at Deutsche Bank. pic.twitter.com/GvxLn1bBZf
— Lisa Abramowicz (@lisaabramowicz1) September 27, 2022
“The market has already repriced UK terminal rates to above 5%, the highest of any other developed market country… If the Bank of England doesn’t follow through with this pricing there will likely be even more currency weakness to go”
Deutsche Bank
— Jonathan Ferro (@FerroTV) September 23, 2022
Historically, it's virtually unheard of to bring inflation of over 5% back down to 2% within 2 years. On average it takes 10 years. h/t Thanos Vamvakidis, @BankofAmerica https://t.co/yUj2CVd9mS
— John Authers (@johnauthers) September 22, 2022
Biggest five stocks in the S&P 500 are still too pricey given rising rates. The rest of the index trades at just 15x. pic.twitter.com/ItrSEWpuWh
— Gina Martin Adams (@GinaMartinAdams) September 22, 2022
Mom and pop have given up.
This week joins just 4 others in 35 years with more than 60% of respondents being despondent in the AAII survey.
One year returns after the others: +22.4%, +31.5%, +7.4%, +56.9%.
But, of course, this time is different. pic.twitter.com/N42aE3szim
— SentimenTrader (@sentimentrader) September 22, 2022
One of the ugliest charts in the markets right now…
Notably, BND has taken-in nearly $10bil this year.
Other broad bond ETFs such as AGG, SCHZ, SPAG, BKAG, etc have approx $600mil inflows combined. pic.twitter.com/DqFoC4hNb3
— Nate Geraci (@NateGeraci) September 23, 2022
In July, more housing permits were issued in the Dallas metro area (population 7.6 million) than in the entire state of California combined (population 39 million). pic.twitter.com/I54XC4n69v
— Joey Politano 🏳️🌈 (@JosephPolitano) September 21, 2022
Disclosure
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