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September

A lot of moving parts are rapidly changing in this market: (1) in the US, the labor market is getting stiff. As you can see in the chart below, it’s no longer easy to switch jobs. (2) China’s stimuli is working, and local markets have rebounded, but this move is probably going to be short lived, since the size of the problem is much bigger than the announced measures. (3) Today the U.S. wil print the Fed’s favorite inflation measure, PCE with consensus expecting a 2.5% increase. (4)The odds for a 50 bps cut on Nov 7th have increased to 55%, and (6) the 2 year Treaaury yield has plummeted to 3.55% (from 5% on June). (7) Gold keeps climbing to new highs above $2,675. On top of that, geopolitical conflicts such as the one in Israel-Gaza-Lebanon are escalating, but the US equity markets are printing new highs (S&P500 up 20% YTD) and the U.S. is now close to 50% of the global equity market measured my market cap. All that is happening on September, which is about to end and it’s considered the worst month for the market.


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