• Stocks have rallied to start November after posting their third consecutive down month in October.   
• Right around the heavily watched 200-day moving average, stocks snapped back last week, rallying nearly six percent on the S&P 500 as interest rates backed off and the chorus of “maybe the Fed is done” rang out. 
• The hope is that the worst is behind us. Many investors have their eyes on the possibility of a year-end rally, which tends to show up in the back end of November through December.
• Market concerns continue to be the Federal Reserve’s aggressive move to tighten monetary policy in light of inflation, which remains above target. 
• The Fed has been resolute in its stance, which at times has conflicted with the market’s rosier expectations. So far, we have seen markets ultimately capitulate to the Fed’s reality.
• More recently, even the bond markets have come around with the 10-year Treasury finally adjusting and discounting higher rates. The 10-year yield rose over a percent from July to its recent highs right around 5%.
• Should Jerome Powell and the team stay resolute, and investors have to make an adjustment to the Fed’s higher-for-longer policy, it could bring a heavy dose of volatility.
• So far, the Fed has managed to ultimately get markets to accept its view, so this is worth watching. 
• For now, patience is likely needed by both the market and the Fed as they interpret and react to what has been stronger economic data in the face of tighter financial conditions.
  

CHURCHILL MANAGEMENT GROUP

Source: Churchill Management Group

info@churchillmanagement.com 

** This report is meant to inform the reader of our current market opinion, which we, as professional money managers, use in our decision-making. It should be noted that stock market and bond market data are subject to varying interpretations and any one interpretation will not necessarily guarantee investment success. The information obtained from the sources specified herein and used as basis for our current market opinion is believed reliable, but we do not guarantee the accuracy of such information.