Get updates on recent capital market data and trends, including possible expectations for future outcomes.
Technical factors continue to be a tailwind for markets, as investor sentiment and positioning continue to shift following a difficult three-month period. Global stocks saw $40 billion of inflows in the last two weeks, the strongest pace in nearly two years, while investment-grade bonds saw their strongest inflows in nearly four months.
While legislators deferred the latest shutdown drama for a few months, investors face uncertainty.
Are stocks poised for a year-end rally? The recent market pullback bears similarities to the 2022 bear market drawdown.
Bulls are focused on healthy macro data, improving seasonality, and extremely pessimistic sentiment and positioning, while bears argue that Fed policy remains uncertain, recession indicators continue to flash, and consumer data is beginning to suggest a slowdown. Earnings revisions further complicate this debate, with fourth-quarter estimates being revised lower but 2024 estimates remaining resilient. Investors have softened their reactions to data in recent weeks, with significantly less volatility.
The economy grew by 4.9% in the third quarter, overcoming high interest rates, a resumption of student loan payments, and widespread recession forecasts. But other challenges persist, like the prospect of a government shutdown.
Insights on financial conditions can help investors understand the impact of Fed policy on the economy.