Patricia Medina

Market Strategy Analyst

Cross assets gave mixed signals with equities, oil, USD, and yields higher today. U.S. equities managed to post six weeks of gains after starting off the week on a sluggish tone. The S&P 500 closed at the highest since March 2022 and the percent of names trading above their 200d was higher on average 61% vs 57% last week. The VIX ended on a 52wk low at 12.3 while the MOVE Index notched higher. U.S. Treasury yields climbed today, after breaking below key thresholds on Tuesday, as investors price out large rate cuts. Most economic releases this week were about the U.S labor market and when adding it all up the employment picture remains resilient albeit cooling under the surface. The U Michigan data also topped forecasts with Consumer Sentiment more optimistic in December due to lower inflation expectations. Rotation out of 2023 winners and into other assets that have trailed, such as U.S. small cap equities, continued this week driven by short covering and year-end performance chasing. Next week, the main catalysts will be U.S. CPI and the Fed’s last FOMC interest rate decision of 2023 with a new Summary of Economic Projections.