- The combination of an FOMC conference followed by employment data makes this week interesting from a macro standpoint.
- My base case is for Powell to come out and continue his slow walk back of higher for longer, strengthening the case for a September cut. Headline unemployment, which roughly has a 33% chance of coming in above 4.1%, could add further pressure for rate cuts.
- Broad indices may continue to sell off, but I find it unlikely there’s more than a couple percentage points left in this retracement. Small and mid-caps should continue to outperform.
- Dollar, yields, and the commodity complex are all hovering around their mid-point over the last year and would benefit risk greatly by continuing a slow but steady drift downward.
