Good Monday AM,

With the bond market closed Friday for Veterans Day, today is the first real trading day since the CPI report. We are giving back a little of Thursdays (and last week’s gains) but nothing to be concerned about. Fed commentary is both bullish and bearish, but it does seem at this point, the Fed is likely to slow down future rate hikes. We have some data this week (PPI tomorrow, retail sales Wednesday, Unemployment claims Thursday) so I would expect some movement in the bond market.

There is a lot of rebalancing needed to be done by funds this month which should lead to another 100b is buys by month end. That should buoy any negativity (I would always follow te supply/demand curve over the data). A few slides below to show where inflation is heading and why the Fed pivot is coming. Also, a quick piece on how the typical investment portfolio of 60/40 stocks to bonds has failed so far this year. I am leaning to being a bond bull expecting rates to drop but also know it won’t be a straight line down, be defensive.

A portfolio with 60% of its money invested in U.S. stocks and 40% invested in the 10-year U.S. Treasury note has lost 15% this year. That puts the 60-40 investment mix on track for its worst year since 1937.

Please remain safe and stay healthy, make today great!