Inside Markets

The intrigue for today's meeting is mostly focused on the updated dot plot. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

We remain tactically bearish as developed markets form distribution patterns amid rising yields and rising crude prices. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

The Fed is widely expected to pause at this week’s meeting. The updated dot plot seems to be the wildcard with a ~30% chance for the median dot to price out another 25bp hike for 2023.   Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

European equity indices are in the early stages of forming what looks like technical distribution patterns. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

Headline CPI should decline over three consecutive months beginning in January and the Fed will signal an end to its tightening cycle in February or March. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

This morning’s August CPI print did little to shift the inflation narrative in either direction.   Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

We continue to see 4525 as the near-term ceiling amid ongoing monetary policy uncertainty. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

The soonest we now see the hiking cycle ending is Q1'24. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

A temporary end to the disinflation theme should make this a ‘bad news is good’ phase for equity markets when it comes to data. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

Today's ISM reinforces renewed concerns around sticky inflation into next week's CPI print. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

The bond market is pricing in a ~37% chance of another rate hike this year. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

This week’s data mostly supported the idea that the Fed is done with rate hikes, but it’s not a foregone conclusion by any means.   Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

Systematic funds should be net-buyers of equities given subtle changes in technical conditions. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

The probability of a soft landing in the current environment seems low given that the current tightening cycle has been the most severe in terms of magnitude. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

We expect labor market data and 'super core' PCE will be the most important inputs for future Fed policy. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

Commodities pulling back from key resistance levels and failing to break higher likely signals a weakening global economy. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

The upside breakout in bond yields creates a headwind for the S&P 500. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

We discussed the historical context to Fitch's warning about potential debt rating downgrades for large US banks. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

Implied equity volatility as measured by the VIX Index remains subdued at 15.80.  The threat of waterfall decline in equity markets seems low as long as the VIX remains below 22. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

The recent repricing in Treasury yields follows last week's increased auction sizes and lackluster demand possibly linked to the US sovereign credit rating downgrade. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

Cooler than expected June CPI and PPI from July made disinflation a major part of the consensus narrative.   Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

We continue to expect a brief period of weakness for the SPX based on ongoing policy ambiguity during a relative catalyst vacuum. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

The Fed will likely focus on the MoM CPI numbers knowing that base effects skew the YoY numbers higher for the time being. Consensus is looking for both headline and core CPI to rise 0.2% MoM in July. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

The recent widening in credit spreads should be closely followed in the days ahead. Recession risk has been priced out of equity markets, but rising recession risk usually starts in credit markets. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.

Last week's pullback in equity markets was driven by a volatile week in the bond market. Would you like to learn more about Jackson Square Capital or receive Inside Markets as a daily email? Join the Jackson Square Capital community by sending an email to hello@jacksonsquarecap.com.