Boyd Watterson Asset Management

WEEKLY MARKET MINUTE The Consumer Price Index accelerated by 0.2% m/m in October, pushing the y/y growth rate up to 2.6% from 2.4%. We have been writing about the rising probability that CPI growth would move higher in the fourth quarter as the shelter contribution remained elevated and the comparison set for energy reversed. The October data confirmed that view. Looking ahead, the direction of commodity prices should provide insight into whether that dynamic is likely to continue. #weeklymarketminute Author: Joseph Khoury

WEEKLY MARKET MINUTE Real GDP growth slowed in 3Q24, but remained positive, largely driven by a rate of change acceleration in consumer goods spending. Looking at 4Q24, we will review the comparison set in consumer spending and what that could mean for headline growth. Tying the macro environment back to the market, we will highlight the recent changes in rate cut expectations. #weeklymarketminute Author: Joseph Khoury

WEEKLY MARKET MINUTE First estimates for 3Q24 GDP have been released for a few of the key countries we monitor closely. While U.S. GDP growth slowed y/y as expected, European data mostly improved in rate of change terms, also as expected. The high-level takeaway is that growth did not move in a direction that is conducive to the pace and magnitude of central bank rate cuts being priced in for 2025. #weeklymarketminute Author: Joseph Khoury

WEEKLY MARKET MINUTE We have been writing about our expectations that rate cuts from the FOMC would be pushed out as inflation stays higher than expected, growth avoids recessionary levels, and labor market activity moderates to pre-pandemic averages. Focusing on the labor component of that setup, our view was that the corporate earnings backdrop likely would not weaken enough to warrant mass layoffs and payroll growth would move closer to 2015-2019 levels. With the earnings season underway, we will start to provide updates on what we see across industries. #weeklymarketminute Author: Joseph Khoury

WEEKLY MARKET MINUTE Last week we received updates on inflation via the Consumer Price Index (CPI) and Producer Price Index (PPI). At the Headline level, both series continued to decelerate y/y, with CPI inching lower to 2.4% and PPI slowing to 1.8%. Excluding food and energy, Core CPI and Core PPI accelerated sequentially for the second month in a row to 3.3% and 2.8%, respectively. The recent divergence of Headline and Core inflation growth is worth highlighting given the shifting comparison set for energy in the fourth quarter and what that could mean for rate cut expectations. #weeklymarketminute Author: Joseph Khoury

WEEKLY MARKET MINUTE For the last few quarters, we have highlighted the rising probability that inflation would reverse its downward trend in the fourth quarter, resulting in rate cut expectations being pushed out. On Thursday we will get an update on the Consumer Price Index and while the base effect setup is pointing toward another y/y deceleration, U.S. Treasury yields and the U.S. Dollar Index have been heading higher. Typically, we would expect those market signals to move in the opposite direction if inflation was going to continue slowing. Looking beyond the September print, we will be watching to see if rates and the U.S. Dollar front-run higher inflation prints that could likely lead to a downshift in rate cut expectations and ultimately FOMC policy decisions. #weeklymarketminute Author: Joseph Khoury

WEEKLY MARKET MINUTE Personal income, spending, and savings data revisions were released last week. This update changed the level of income meaningfully, resulting in higher y/y growth rates on a nominal and inflation-adjusted basis. Notably, spending data featured smaller upward revisions than income, leaving the personal saving rate much higher than what had initially been published. #weeklymarketminute Author: Joseph Khoury

WEEKLY MARKET MINUTE With 41 days until the U.S. Presidential election and 43 days until the next FOMC meeting, we are expecting conversations around those outcomes to become a larger focus for investors. To help navigate the noise, we thought it would be helpful to lay out the upcoming economic and earnings calendar. As those dates draw closer, we will remain focused on incoming data. #weeklymarketminute Author: Joseph Khoury

WEEKLY MARKET MINUTE At their September 18th meeting, the FOMC cut its Federal Funds Target Rate by 50 basis points. Looking ahead, the Fed Funds futures market expects an additional 200 basis points of rate cuts by the end of 2025. Over the next few months we will be monitoring Shelter inflation, the price of oil, and other commodities, alongside key market signals like the 5-year breakeven inflation rate to help determine whether the current expectations are more or less likely to come fruition. #weeklymarketminute Author: Joseph Khoury

Thank you to Crain's Cleveland Business for covering our parent’s recent merger with Amber Infrastructure Limited, a move that effectively doubles total client assets under management and expands operations of the combined company internationally. This merger elevates the company’s combined global AUM to an estimated $35.7 billion and expands the combined Boyd/Amber team to around 310 employees. We believe this combination will open new doors for strategic growth and international investment opportunities and also enhance our ability to deliver superior products and services, paving the way for further growth and long-term success of Boyd Watterson. To explore more about this significant development, check out the full article from Crain's. ???????????? ???????? ???????? ?? ???????????????????????? ???? ???????????????? ?????? ????????????. ??????? ?????????????? ???? ?????????????? ?????? ?????????????????????????? ???????????????? ???????? ?????? ???? ?????? ???? ?????????????????????? ???? ???????? ?????????????????? ???? ????? ???????????????? ???????????????? ????????????????. Thank you for your continued support as we embark on this exciting global journey! #BoydWatterson #AmberInfrastructure #GlobalGrowth #CrainsCoverage #InvestmentOpportunities