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September 29, 2024 Observations

  • As predicted in last week’s observations, the PCE came in lower at 2.2% year over year giving the Fed more breathing room to ease further at the next meeting.
  • The key data point this week is of course the unemployment rate. A steady or falling print will do much to assure market participants that the risk-on rally is safe. Secondarily, U6 will help shed light on whether broader labor conditions are deteriorating. I’d like to see it stay below 8%.
  • I’m still hearing plenty of bear cases being made in the media as well as throughout the podcast sphere. While it’s impossible to know the amount of money betting on a recession, it’s clear that there are participants who, sooner or later, will have to join the bull market or risk their careers.
  • China has publicly committed to increased stimulus this past week. At a minimum this will help fuel global assets and inflation hedges like gold and bitcoin.

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