Outlook: We head into December with a strong macro backdrop that should result in the S&P 500 rallying through 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. A rate cut to finish the year could lead to a blowoff until the policies of the Trump administration materialize.

Equities: The total stock market continues to buoyed by the resurgence of small- and mid-caps. The price action appears to be hitting an inflection point that could result in a blowoff some time around early next year. Bullish.

Dollar: The Dollar has topped. Bearish.

Debt: Rates will continue to be pressured to the downside as the Fed cut rally fades. Bearish yields.

Commodities: Last year when crude sat on support for this long it rallied over 35%. I’m not calling for that big of a rally, but the alternative would be a breakdown which has been denied going on over 3 ½ years now. Relief in the form of a falling dollar should help initiate the rally. Bullish crude.

Crypto: The Trump trade and bullish seasonality continue to fill this rally. Bullish.