We publish on a 3-day a week schedule:
– SKIP MONDAY <-- Labor Day Holiday
– SKIP TUESDAY
– SKIP THURSDAY
Today's note will include a short video update. We discuss: Why we expect markets to gain 2%-3% in September, supported by falling inflation and softening labor markets. The key to watch is Fed fund futures and 10-yr yields. But the probabilities favor an up month given the soft August and the YTD gains already (Duration: 7:05).
Equity markets finished down 2% for August, consistent with our view that August would be "a tough month" for stocks. And since 8/23, we timidly decided to shift back to "risk on." And as we look towards September, we expect September to be a positive month for equities. And you might be wondering what sort of things we are watching and what events could lift markets. This is what we want to cover in this note:Foremost, we believe economic momentum is cooling in a favorable way, and specifically, labor market and hiring pace is slowing. The August ADP and July JOLTS report this week underscored this. And we believe today's August NFP (payrolls report) will show a c...