Everything is priced in.
Today’s comments from Waller were the most-dovish of the cycle and that was immediately reflected in Fed funds futures pricing in 100 bps in cuts next year from 87 bps. Initially, stock markets also rallied but they’ve since given it all back.
Why?
Goldman Sachs estimates there will be $9B to sell for equities on month end rebalancing. Those flows following one of the best months for stocks ever, along with a healthy dose of profit taking, are likely keeping a lid on stocks.
SPX hourly
The good news, Mike Zaccardi highlights that in the best 20-months in the S&P 500 over the past 30 years, the following month has seen an average gain of 2.1% and a median gain of 3.5%.