· If U.S. investors were feeling anxious about global events it was difficult to detect, as big rallies in U.S. equity and credit markets drove stock prices higher and interest rates lower.
· U.S. equity markets, as measured by the S&P 500, reversed three months of losses rising 9.9%.
· U.S. fixed income markets, after six consecutive monthly losses, bolted higher gaining 4.6%.
· U.S. 3-month Treasury yields retreated only modestly, declining 15bps from ~5.6% to ~5.5%.
· International markets kept pace, with developed and emerging markets gaining 8.2% and 7.8% respectively.
· Inflation continues to fall toward central bank targets in both the U.S. and Europe.
· Financial conditions eased materially as rates fell and credit spreads narrowed across corporate bonds.
· While the odds favor a soft landing for next year, it is likely not by a large margin. Per GDPNow, growth estimates for Q4 are now running at 1.2% versus 5.2% in Q3. Consensus estimates for CY 24 GDP growth are 1.7% and CPI 2.5%.
· In a recent speech, Fed Chair Powell indicated “we are getting what we wanted to get” and indicated that he sees U.S. economic and job growth continuing but at a moderating pace.
· Futures markets now anticipate the Fed will begin rate cuts in March 2024 and rates will decline 100bps towards 4.0% to 4.25% by December 2024.
· Internationally, developed markets continue to display mixed growth with Europe near 1.0% and China experiencing
slowing growth due, in part, to falling real estate values.
· Globally, PMIs are strongest in emerging markets such as India and Mexico and weakest in Germany and France.

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