Exiting Feb, S&P 500 +7% YTD. Next key decision point is Feb CPI on March 12. Beware of "residual seasonality"

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

VIDEO: We discuss how the key date is likely March 12, Feb CPI day.  The key is the residual seasonal problem in Jan often spills into Feb

Please click below to view our Macro Minute (Duration: 4:53).

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

With the first two months of 2024 behind us, the S&P 500 is off to a strong start with YTD gains of +7%. As we noted in prior comments throughout this year, equity markets seem to be getting stronger in 2024, compared to 2023. This is measured by the resilience of stocks in the face of what appears to be a diminished number of Fed cuts.

We wrote previously that we saw little risk to stocks from the Fed potentially making fewer cuts in 2024. This has been true so far as stocks have risen even as the timing and number of Fed cuts has been sharply reduced since the start of 2024. And this will be true but as long as the Fed is seen as turning "dovish" -- that is just our opinion, but something to be mindful of. That is, at some point, if the "inflation is stubborn" narrative gains dominance, and the Fed is required to react to this, then markets may be pricing in a "tighter for longer" Fed. This is not our base case, and that is because we see the "stubborn inflation" st...

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