Stick a fork in the Fed

*past 24-hour performance

💨 TL;DR

  1. The CPI print came in at 3.2%, slightly below expectations.

  2. Markets surged on the news. Most analysts think the Fed is done hiking rates, and some are pointing to a rate drop in spring 2024.

  3. Treasury yields declined significantly on the news, but precious metals ticked up slightly.

  4. The Fed is expected to leave interest rates unchanged in its final meeting of the year on Dec. 12 and 13, with the fed funds rate staying at 5.25 to 5.5 percent.

  5. The House passed a bill avoiding shutdown. For now.

📰 Market Headlines

  • The CPI print came in below expectations. Lower gas prices helped cool overall inflation, which was unchanged from September to October, down from the 0.4% jump the previous month. Compared with a year ago, consumer prices rose 3.2% in October, down from 3.7% in September. Many services, notably rents, travel, and health care, are still rising faster than before the pandemic.

  • Stick a fork in the Fed. Most analysts agree the Fed is done raising rates. “October’s cooler than expected CPI report keeps the Fed on course for rate cuts in 2024,” said Bill Adams, chief economist for Comerica Bank. Barclays is a notable dissenter — the British bank sees one more hike coming. But it’s not all peaches and cream. “Former IMF Chief Economist Ken Rogoff says interest rates likely won't need to rise much further, nor will they eventually fall as much as investors would desire.” Pundits and traders say the first cut could come in May.

  • Markets Mooned: Each of the S&P 500, Nasdaq, and Dow Jones had their best CPI day in a year, up between 1.43% and 2.37%.

  • Asian shares surged higher this morning, cheered by yesterday’s rally on Wall St. Markets were up ±2% across the board.

  • Kicking the can down the road: The U.S. House of Representatives passed a spending bill that would avert an impending government shutdown. More Democrats voted for the bill than Republicans, with only two Democrats voting against.

  • Hit the breaks: With interest rates persisting above 9%, small biz owners are putting off equipment purchases and stepping up collection efforts.

  • Not just for retirees and spring breakers: Ken Griffen, founder of mega hedge fund Citadel, thinks Miami could replace NYC as the global financial capital.

  • In the red: Plunging prices for platinum and other critical metals could derail mining investment needed to develop new supplies, posing a significant threat to decarbonization targets set by countries around the world.

  • Goldman Sachs: Everything Is Awesome: Goldman Sachs’s macro analysts have been notably more optimistic than almost everyone else on the street throughout 2023, and, as a result, basically nailed it.

🧠 What do you think?

How much are you spending this holiday season?

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🕶️ Market Vibes

😱 Fear and Greed Index

🎤 What you said

You’re a pessimistic lot with 60% saying 2024 will be worse than 2023.

Things will be better

“Now that interest rates are near a high…. every business can know what steps to take, in order to deal with it… We, therefore, as individuals will possibly be better prepared to grow our accounts… ”

Things will be worse

“Interest rates approaching 8%, from 2019 to present housing has been purchased using variable rate mortgage, credit card debit is at a all time high, car sales are dropping and layoffs are ramping up.”

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🌎 Global Perspectives

🇻🇪/🇬🇾 The next geopolitical flashpoint could center around Venezuela and Guyana as they sort out rights to the 11 billion barrels of oil off its shore.

🇯🇵 Japan’s economy shrunk for the first time in three quarters.

🇨🇳 China’s retail sales and factory output grew more than expected in October

🇨🇳 China has more than 20 million units of unconstructed and delayed pre-sold homes

🇩🇪 German housebuilding is on the brink of collapse as construction projects are being canceled and orders are slowing.

🇬🇧 UK inflation fell sharply to 4.6% as energy prices eased.

💎 Wealth Watch

Facing financial ruin as costs soar for elder care.

Higher contribution limits are coming for 401(k) retirement plans.

Social Security and 401(k) plans leave Americans less secure than retirees in much of the world.

🗳️ Outside the Box

  • Colombia is sterilizing over 100 hippos descended from Pablo Escobar’s pets.

  • Four Long Island men stole $2 million from online brokerages by setting up dummy accounts.

  • How Wall St makes millions selling auto loans borrowers can’t repay.

  • Why Zoom meetings make your brain go numb.

  • The 50 best sports films based on true stories. I take issue with many of these.

📺 What to Watch Today

📈 Trends you need to know

Brought to you by our friends at Glimpse, my favorite way to spot trends.

Interset in high yield savings accounts exploded over the last 12 months but has tapered off as interest rates have plateaued.

That’s all for today. Did we miss anything? Smash reply to let us know.

Cheers,

Wyatt

Notes

Please read this disclaimer. The authors of Alt Assets, Inc. are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content should not be taken as professional advice. They are self-taught accredited investors, sharing information, research, entertainment and lessons learned based solely on their own experience and circumstances. Individual results may vary. The published content is unique, based on certain assumptions and market conditions at the time of publishing, and is intended to serve solely as research, not financial advice. For entertainment purposes only. Not investment advice. Alts I LLC (the “Fund”) is an affiliate of Alt Assets, Inc. and the Fund has conducted a private placement offering under Rule 506(c) of Regulation D of the Securities Act of 1933, as amended. The Fund may invest in one, several, or all of the alternative asset classes that Alt Assets, Inc. publishes content about on its site. Any of the Fund’s investments that have positive designations on the Alt Assets, Inc. site are purely coincidental, as the Fund is actively managed and guided by its own investment parameters, as summarized in the relevant private placement memorandum. Alternative investing involves a high degree of risk, including complete loss of principal and is not suitable for all investors. Past performance does not guarantee future results. The newsletter may contain affiliate links, meaning that Alts.co and its associated entities may receive compensation for referring customers to the noted companies. We recommend seeking the advice of a financial professional before you make any investment in an alternative asset class or any associated entities, and we accept no liability whatsoever for any loss or damage you may incur.

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