Core Viewpoint - The current financial conditions are favorable, and the Federal Reserve's rate cuts may not have been necessary, leading to market volatility and presenting investment opportunities outside speculative assets [4][6]. Financial Sector Analysis - The financial sector is not experiencing a hiccup that would inhibit lending or slow GDP growth, as financial conditions remain easy with tight credit spreads [3]. - Prior to the pandemic, GDP was tracking around 3.5% to 4%, indicating a strong economic backdrop [4]. Investment Opportunities - There is a significant speculative nature in the market, with record participation in options and leveraged ETFs, suggesting a potential for volatility that could highlight alternative investment opportunities [5][6]. - The focus should be on boring investments such as dividends and quality stocks, particularly outside the tech sector, where non-US quality stocks are growing faster than major US tech companies [5][6]. Geographic Focus - Increasing non-US exposure is recommended, particularly in quality large-cap stocks in Europe and Asia (excluding Japan), which offer higher dividend yields, faster growth, and attractive valuations [8]. - The current market conditions present a growth story for non-US investments that was previously lacking [8]. Crypto and AI Investment Stance - The company has historically been critical of crypto and has not engaged in it, suggesting a cautious approach to speculative assets [9]. - For AI investments, diversification is advised, with a recommendation to take profits from significant gains and reallocate into a more balanced portfolio [10].

Economic Outlook - The government shutdown is expected to depress GDP growth during its occurrence, but growth may rebound in the following quarter once the shutdown is lifted [2][3] - The current economic outlook remains largely unchanged despite the shutdown, with the potential for some growth not being fully recovered due to the prolonged nature of the shutdown [2][3] Federal Reserve Projections - The Federal Open Market Committee (FOMC) had projected three interest rate cuts for the year, but recent inflation data has been better than expected, suggesting a more dovish stance may be warranted [5][6] - Labor market data indicates a gradual softening, with new job openings, wages, and jobless claims reflecting continued weakening [6][7] Inflation Data Analysis - Current inflation data is considered backward-looking and may not accurately reflect future trends, as many rely on stale data [8][9] - Market-based core measures of Personal Consumption Expenditures (PCE) are closer to the Fed's target than traditional measures, indicating a potential decline in inflation [11][12] Future Data Expectations - Updated inflation data may take time to be released following the end of the shutdown, with labor market data also expected to be somewhat outdated [13][14] - The focus should remain on forward-looking policies rather than solely on past data, as no significant changes have occurred since the last FOMC meeting [15][19] Economic Performance Indicators - Factors such as tax refunds and depreciation are anticipated to contribute to stronger economic performance in the first half of the next year [16] - The output gap, which compares potential GDP to actual GDP, is crucial for understanding economic growth and may necessitate rate cuts [16][19] Financial Conditions - Financial conditions are viewed as nuanced, with some markets appearing tight, particularly in housing, which is more relevant for economic growth than equity markets [23][24] - The central bank's focus should remain on achieving maximum employment and stable prices rather than solely on financial market conditions [21][22]

I want to get your take on the USChina trade deal. Still some other things to be worked out, but the lowering of tariffs seems pretty significant in your mind. Does that increase GDP. Does that change anything about the markets.>> So, I think that the USChina discussions were in line with expectations. I mean, both sides had choreographed that they wanted a successful outcome. I think it's a fragile stability.I think it's important not just the um fentinel tariffs, but that what China is doing itself, it's ...

Market Overview - The S&P 500 index reached a record high, with only 108 companies in the green contributing to this achievement [1] - There is a noted disconnect between surging asset prices and weakness in the labor market, which the Federal Reserve will need to address [3][4] - Financial conditions are tight, yet job cut announcements have been significant, indicating potential challenges ahead [5][6] Earnings Reports - Booking Holdings reported a third-quarter adjusted EBIT of $3 billion, exceeding expectations [9] - PayPal shares rose nearly 13%, finishing the day with a 4% gain, driven by a partnership with OpenAI [11] - Nvidia's planned $1 billion equity investment in Nokia led to a 22% increase in Nokia's ADRs, highlighting a successful pivot towards AI [13] - UPS shares increased by almost 8% after surpassing profit expectations and announcing significant cost-cutting measures [14] - Wayfair experienced a 23% jump, marking its best day since January 2020, reflecting strong marketplace performance [15] Decliners - JetBlue shares fell nearly 12% due to challenges anticipated during the holiday travel season and rising fuel prices [19][20] - DraftKings and Flutter Entertainment shares declined following reports of increased competition in the sports betting market [20][21] - V.F. Corp saw a 12.2% drop after issuing third-quarter guidance that missed consensus expectations [22] Additional Earnings Insights - Mondelez reported an adjusted EPS of $0.73, slightly above the expected $0.71, but its adjusted gross margin fell short of estimates [25][26] - Frontier Communications reported third-quarter revenue of $1.55 billion, slightly above expectations, with adjusted EBIT of $637 million [28] - Visa's fourth-quarter adjusted EPS was $2.98, marginally beating the estimate of $2.97, with net revenue also slightly ahead of expectations [29][30] - Enphase reported an adjusted EPS of $0.90, beating the expected $0.65, but provided guidance for the fourth quarter that was below street estimates [31][32]

RT Julien Bittel, CFA (@BittelJulien)Ok, let’s get one thing straight…Delinquency rates on credit card loans (or otherwise) are not a leading indicator. The ISM is not a leading indicator. PMIs are not a leading indicator. Heavy truck sales are not a leading indicator. Job openings are not a leading indicator. Consumer confidence is not a leading indicator. Small business confidence is not a leading indicator. Durable goods orders are not a leading indicator. Capital goods orders are not a leading indicator ...