- We head into December with a strong macro backdrop that should result in the S&P 500 rallying through the year end.
- The dollar and rates have peaked, commodity prices remain low, and equity markets have broadened into the mid- and small-caps, signaling the risk-on trade.
- Consumer price indices have stalled in November and will likely rise in December due to unfavorable base effects from last year. Do not mistake this for a return to inflation as we move into 2025 with significantly lower demand pressures and geopolitical tensions than winter/spring of 2024.
- This week presents the last jobs data for the year and a prime focus for the Fed. Markets are pricing a 70% chance of a rate cut at the December meeting. Expect this probability to move in conjunction with the direction of data.
