November 15, 2024
Good morning,
Sorry for the miss yesterday morning, I’ll think twice before getting the flu shot and covid-booster at the same time (Wednesday). It was “Man Down” early Thursday morning. Now back to our regularly scheduled program.
The equity market got a reason to exhale yesterday after almost 2 weeks of rallying. Fed Chair Powell stated “not in a hurry” to cut rates further, and while it’s not clear whether he meant next month or next year, traders had their profit-taking moment. The Fed has cut rates 75 bps since 9/18 while the 2yr U.S.T. yield had gone in the opposite direction and risen 75 bps. It’s quite clear that the market is in control of the yield curve now.
The 10-year Treasury yield jumped after the election and is now approaching 4.5%, up from 3.6% in September. The rise in yields has not been fast enough to hit levels that have derailed past stock market rallies. However, if the upward trajectory continues, those critical levels will be reached soon. More on that in the monthly letter below.
Be well,
Mike
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