Overnight we saw US stocks surrender early gains after bond yields again posted fresh 2022 highs following hawkish remarks from Fed Reserve officials and swaps are now pricing in a 5% peak policy rate in 2023. This time it was the Philadelphia Fed chief who said policymakers are likely to raise rates “well above” 4% and hold them at restrictive levels. On the company level, IBM beat forecasts whereas Tesla Inc (TSLA US) fell over -7% after its sales disappointed, one positive is the bar of expectations appears to have been lowered allowing for more surprises on the upside.
- We still believe investors are positioned for lower prices for US stocks which by definition leaves plenty of room for short-term surprises on the upside.
MM remains bullish on US equities into Christmas
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