Fedspeak reinforces Fed on pause. Positioning still key driver this week.

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The chart in this report is only accessible to members

We discuss: Fed speak Tuesday is consistent with Powell’s dovish message last week — Fed has made a pivot away from data dependence towards forward looking views. Manheim today supports lower core in Dec/Jan. Positioning still key in this light macro data week.

Please click below to view our Macro Minute (Duration: 4:06).

The chart in this report is only accessible to members
The chart in this report is only accessible to members

Many investors are skeptical of the surge in equities since 10/27 (many see this as simply another "false rally.") But these gains have come on the heels of a change in tone from the Fed ("dovish") and at a time when economic data remains supportive of a soft landing (cooling inflation). In terms of market internals, there has been a substantial improvement with better market breadth and continued follow through. Since 10/27, the S&P 500 is up 7% and Nasdaq an even larger 9%.

It is reasonable for one to expect markets to consolidate these gains, particularly this week, which is very light on macro-economic data. But as we highlighted in our video yesterday, given the bearish positioning by both institutional and retail investors, we believe stocks likely levitate on the absence of macro news. There is a lot of Fed speak scheduled this week, with 7 speakers on Tuesday, another 5 for Wednesday a...
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