Chart of the Week
It’s December, which means we’re focusing on holidays, get-togethers, and annual forecasts before the calendar flips to 2023. Strategists are placing point targets on the S&P 500, which we know by definition is nearlyan impossible task. Investment firms are looking closer at bonds; with one of the deepest selloffs in four decades, this is no surprise. As shown below, the yields are near the highs over the past 10 years across most fixed income asset classes. The future looks brighter than a year ago, despite the pain of rapidly rising yields.
What We’re Reading
Higher Bond Yields Can Be Fundamental to a Recession Investing Playbook – PIMCO
The Rise and Fall of Big Tech – MSCI
Likely “Dramatic shift” in Household Formation has “Major implications” for 2023 – Calculated Risk
FTX Collapse was a Crime not an Accident – Coindesk
Podcast of the Week
Jim Chanos on Crypto, Tech and the Golden Age of Fraud – Odd Lots, Bloomberg
The Past Week
The jobs report this past Friday showed more jobs gained than expected and wage growth came in hot. Two key pieces of data showed that inflation data continues to slow. The core price index for personal consumption expenditures was lower than expected along with the producer price index. This provides more cover for the Fed to shift down to a 50 basis point hike next week.
The Week Ahead
On Monday morning, we had a few data releases. Services for the data from Institute for Supply Management showed continued expansion in the U.S. The S&P Global Purchasing Manufacturing Indices showed contraction indicating that international economies are slowing. Later this week we will see how consumers are feeling with the University of Michigan Sentiment Index.
Thank you for reading.
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