Macro This Christmas week has been relatively quiet, with minimal market movement and limited economic news. Investors are now focusing on the upcoming year, with growth remaining a key concern. Reducing the Federal Funds Rate is expected to create a virtuous cycle by lowering real interest rates, encouraging capital spending, enhancing productivity, and accelerating economic growth. However, achieving this outcome depends on the Federal Reserve reaching its inflation target—a goal…

Macro The December Federal Open Market Committee (FOMC) meeting was the week’s key event. Contrary to analysts’ strong expectations of a 25 basis point rate cut and signals of a potential pause in future cuts, the meeting was perceived as more hawkish than anticipated. The official statement included a minor but significant adjustment, indicating that the committee is preparing to assess the “extent and timing” of any further policy changes.…

Macro Investor macro analysis is heavily influenced by U.S. politics, centered on the presidential transition and cabinet appointments. Concerns persist over potential destabilization stemming from efforts to “dismantle the deep state,” which includes the intelligence community, defense establishment, and broader bureaucracy. However, optimism surrounds the prospects of deregulation and reduced government intervention, which could enhance efficiency and improve fiscal discipline. Resolving international conflicts is also a priority, with potential to…

Macro The U.S. economy delivered mixed signals. Initial jobless claims fell for the third consecutive week, but continuing claims rose to a three-year high. The Philadelphia Fed manufacturing index returned to contraction, but the composite PMI reached its highest level since April 2022, buoyed by strength in services. Housing data painted a mixed picture: October housing starts missed expectations, partly due to weather, but NAHB sentiment climbed to a seven-month…

Macro Initial jobless claims in the United States fell by 6,000 to 213K, beating expectations of 220K and reaching their lowest level since April. At the same time, however, continuing claims rose by 36K to 1.91 million, the largest increase in three years, suggesting that overall demand for workers may be softening. Despite this mixed signal, the labor market remains relatively strong. The unemployment rate stands at 4.1%, and job…

Macro This week, the market has been digesting the first rate cut of the current cycle. The Fed began its easing with a jumbo 50 basis point cut, managing to avoid spooking the market. While the market had priced in nearly a two-thirds chance of a 50 bps cut the day before, the size still surprised some observers. With the first cut set at 50 bps, the probability of a…