Published August 2, 2024
The market tone has shifted notably this week as soft economic data pushed forward two competing narratives: 1) the Fed will almost certainly begin reducing short-term interest rates at their September meeting, 2) the economy may be softer than expected. The long-expected reduction in interest rates has been a recent boon for interest rate-sensitive stock sectors like financials, real estate, and small company stocks. But the softening economic data was read as surprising. It was the soft economic data that sent yields crashing this week and pulling stocks down with them. Furthering the slide, expensive Mag 7 stocks have largely failed to deliver earnings that would keep investors on board. (more…)
