This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:
The bullish euphoria that came from the possibility of a quick return to neutral rates after the Fed’s 50 basis point cut in September has faded. But it’s been swapped with a different bullish sentiment, one we all know very well: the strength of a hot economy, which has helped power the market all year — until that cut.
While inflation and economic reacceleration concerns have returned after a string of hot data (the September jobs report, the Consumer Price Index, hot retail sales, and calmer weekly jobless claims), the strength has done nothing if not buoy the market. It has done just fine (thank you very much) under the past few years of high interest rates and endless no-landing comments. A hot economy is good for stocks.
All this has kept the S&P 500 floating around its all-time high all week, now well over 5,800, as the index passes more and more year-end forecasts — and their subsequent upward revisions, like UBS’s 5,850 figure that it published Tuesday.
The mood feels different than a month ago. But as our Chart of the Week shows, not a whole lot has actually changed in terms of expectations — especially to the downside.
