Equity Markets Surge with Rate Trends: Homebuilders Lead🤝
Unsurprisingly, equity risk proxies followed the move in rates, where the US homebuilder sub index saw the biggest gains all year, jumping well over 5% on the day, where expectations of falling funding rates and a still historically tight housing market are expected to provide positive PNL tailwinds for homebuilders.The rest of the equity complex joined in on the fun, with the S&P 500 seeing a 2% rally with a 93% up-day, with every single sub-sector in the green, even with the embattled healthcare and energy sub-sectors. Furthermore, with the peak in terminal funds appearing to be in sight, and worries about unsustainable treasury supply kicked into next year (thanks Secretary Yellen!), the conventional 60/40 portfolio has seen a massive 5% return over the past-month with the synchronized rally across cross-asset classes.
#EquityRally #HousingMarket #S&P500Rally #HealthcareEnergySectors #60/40PortfolioReturns

Market Maintains Buying Stance: Supported by Multiple Positives📈
Looking forward, markets are likely to remain on a buy-the-dip mentality given the combination of a disinflationary trend, positive earnings growth (albeit on weaker outlooks), peak terminal Fed Funds, overwhelming US economic soft-landing consensus, strong trading technicals, no government shutdown risks into year-end, and hopes for an improving US-China relationship post President Xi's visit to SF this week. The equity rally is likely somehow overdone in the short-run, but the catalysts for a larger scale sell-off are scant, and we expect this positive run of macro sentiment to persist in the year, at least until the worries of US fiscal largess will inevitably surface again in a few months.
#DisinflationaryTrend
#EarningsGrowth #TradingTechnicals #GovernmentShutdownRisk #USChinaRelations #EquityRally