This note is just a high-level overview of market movements over the past month.
More detail is left to our other notes written during the month upon key releases/events.
A stunning month for nearly everything; the Waller comments that rate cuts (as per a Taylor rule type function when inflation is almost at target) could be just 4-5 months away supported an already-ignited rally in stocks and bonds (yields lower) that lifted almost all segments of the market.
Long-duration property (NAREIT index), long-duration bonds (20+yr treasury bonds) and shares of all stripes (quality, value, growth) performed well. The only real benchmark in the red was the commodity index.
Waller’s interview, Powell’s lack of pushback, and the PCE print (essentially a hair over 2%) mean that the Fed is now cautiously confirming victory, that inflation has been defeated, and the soft landing is at the point of plane wheels touching tarmac.
Brazil was one of the best performing indices. Note, we are running this a day after month end, and so it isn’t a perfect calendar match (which is fine, the point is “how have things gone over the past month”). Brazil is keen to join OPEC, which is one of the more baffling decisions we can think of. China, the EM, and Australia towards the lower end, although still positive on average.
The S&P500 has strongly recovered the past quarter’s sell-off.
More locally, Healthcare (as CSL, COH, RMD, and FPH either recovered or rallied) performed well, and both Health and REITs are generally viewed as duration sensitive. Energy struggled with weaker oil and gas prices (a seemingly well-supplied market, to the point where OPEC is cutting, however the market continues to look less at the cuts and more at the spare capacity, which is enormous, and to look at OPEC member disharmony/disgruntlement). Plus, the US keeps ratcheting up production each time the cartel cuts, so supply deficits do not look likely anytime soon.
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