Economic Optimism, Mortgage Rates, U.S. Dollar
July 14, 2023 | FIRESIDE CHARTS
The Consumer Price Index (CPI) rose less than expected in June, bolstering optimism that inflation is behind us. Despite the positive inflation data, the market believes the Federal Reserve is locked in for at least one more rate hike. As long as the economy remains robust, the Federal Reserve will lean towards a more restrictive monetary stance. As usual, equities are ahead of the game and have already priced in a fair amount of optimism. Investors are playing the “catch-up” trade. Mortgage rates approach 7%. The U.S. Dollar. Threads.
1. It’s only one month, but June’s headline number is consistent with pre-pandemic monthly inflation:
Source: The Daily Shot 7/13/2023
2. Historically, the Federal Reserve has delivered when a rate hike is priced into the market:
Source: The Daily Shot 7/13/2023
3. The movement in consensus GDP growth estimates illustrates how recession fears abated during the quarter:
Source: Federal Reserve Bank of Atlanta
4. Equities look unattractive relative to bonds without meaningful earnings growth:
Source: The Daily Shot 7/10/2023
5. Investors are expecting revenue growth and margin expansion next year:
Source: MRB Partners
6. We hope those playing the “catch-up” trade have a fundamental thesis for their investment:
Source: BofA Global Research
7. Homebuilders are now expected to grow home sales this year, but 7% mortgage rates may slow some of that momentum:
Source: The Daily Shot 7/12/2023
8. A falling Dollar will provide a tailwind for international assets:
Source: The Daily Shot 7/13/2023
9. Meta’s Twitter clone, Threads, has now usurped ChatGPT as the fastest product to reach 100 million users:
Source: @chartrdaily
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.