Up, up and away…
It’s been three weeks since the election, and we’ve seen a significant market reaction. It seems the changes to monetary policy finally decided to show up in certain areas while not in others.
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Are we there yet?
All year in From The Trading Couch(FTTC), we’ve discussed upcoming policy changes and examined interest rate-sensitive sectors, bond yields, and the U.S. dollar (USD). We reviewed different cycles to gauge what to expect moving forward. Now that rates have been cut, why aren’t markets reacting as expected? Why are mortgage rates rising? Is it different this time?
Here we go.
The effects of the U.S. Federal Reserve’s interest rate cuts are becoming more apparent, especially as China has rapidly responded with massive economic stimulus measures.
The $50 Pizza.
After nearly three years of navigating through scary headlines, the moment we’ve been preparing for is here—monetary policy change is happening.
Finally, rotation!
Throughout the year, we’ve discussed the rotation out of mega-cap tech stocks into higher beta assets, analyzing the accumulation phases that anticipated changes in monetary policy.
Tipping Point?
It’s been a long time since we’ve seen a positive narrative in the markets. Coming out of COVID, it’s been a never-ending stream of negativity. If it wasn’t a new strain of COVID, it was a new war breaking out or that mystical, phantom inflation that crept its way into our economy at exactly the wrong time. Pick your headline; it’s been nearly three years of one thing after another.