S&P 500’s Short-Lived Celebration – Recession Trades

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S&P 500 celebrated inflation data coming in line with expectations yesterday, but the joy proved preditably short-lived as the realization that Fed would still not declare victory over inflation prevailed, and bond markets confirmed it. Junk corporate bonds remain dangerously overstretched here, and a similar fate to EEM or IWM awaits. Note also the disconnect between KRE and XLF, pointing to increasing concentration in banking ahead still. Q4 2022 hedge fund letters, conferences and more Whenever Treasuries rise, the appeal of risk-free rate of return decreases, and deposit outflows take it o…

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