Michael P. Reinking, CFA

Sr. Market Strategist

November is officially in the books and it was quite a month. As we highlighted, equity markets had moved consistently lower for three consecutive months heading into November with positioning and sentiment conditions getting to extremes, ahead of a historically very strong seasonal time period. The same positioning dynamics were also apparent in Treasury markets. This combination along with inflation data which continued to move in the right direction and economic data which points to some deceleration of growth, gave investors the sense that one of the most aggressive tightening cycles in history has concluded. Treasury yields pulled back sharply during the month as traders priced out the possibility of future rate hikes and began to aggressively price in rate cuts next year. The 2yr yield was down nearly 50bps while longer dated Treasury yields were off closer to 65bps. The positioning dynamics were the tinder and this was the spark which led to the largest monthly gain in the S&P 500 since July of last year ending the month up nearly 9%.