What's Moving Markets?

Over the last week macro asset markets fell in aggregate on a broad-based basis. Gold and commodities particularly saw a pullback this week. Stocks ended the week essentially flat, and bonds fell.

Economic data momentum rose this week, driven by durable goods, jobless claims, and U-Michigan sentiment surveys. The broad trend in data remains consistent with a growing but slowing economy.

For a further understanding of how economic dynamics have been priced into markets, we show our tracking of market-implied macroeconomic regime probabilities.

Markets have now moved and are now pricing in the dominance of inflationary conditions within a rising growth environment in cross-asset pricing. This pricing continues to weigh on bond markets to the benefit of equities and commodities.

Finally, consistent with these business cycle conditions, our programmatic nominal GDP forecast, which drives our Asset Allocation Strategy, places nominal GDP at 6.3% versus one year ago:

Currently, our systems estimate that Q3 2024 nominal GDP growth will be 6.3% versus one year prior, with real GDP of 3.6% and Inflation of 2.7%. These are programmatically generated numbers and tend to be better at spotting regimes than getting growth right to the decimal point. We expect to remain in a macro regime of high nominal GDP. Until next time.