Economic Insights

The producer price index (PPI) release, which generally reflects wholesale prices, which ultimately feed into consumer prices, was below estimates on all fronts this morning (including core).

Bonds had a great month in November. Indications that the Fed will pause again were extrapolated into easing expectations as soon as next quarter. Lower yields help the relative valuation of equities, although Factset earnings forecasts are no longer trending upwards.

Securities markets shrugged off a challenging three months and delivered robust gains across the board in November as hopes for a soft economic landing gained ground among investors.

There are many ways to track consumer and investor sentiment. Generally, only at extremes does the data offer very compelling investment opportunities.

The AAII Investor Sentiment is painting an intriguing picture as we step into the third week of increasing bullish sentiment.

The AAII Investor Sentiment is painting an intriguing picture as we step into the third week of increasing bullish sentiment.

Last week’s market surge carried the November rally forward, a momentum fueled by a significant repricing of interest rates in the bond market. Since the last Federal Reserve meeting, rates have taken a dramatic dip, sparking optimism in the market.

CPI is now stable and trending modestly lower with the Fed able to be patient. The stage is now set for broader participation across size & style boxes.