Expectations for another rate cut in December grew significantly last week, while solid economic data and the anticipated pro-growth political agenda continue to drive investor optimism. Market valuations remain “frothy”, but well supported by the data.

Treasury yields were largely unchanged last week with the 10-year yield hovering around the 4.40% mark, despite the solid economic growth data in the US while the dollar spiked to new highs for the year amid weaker European data. Commodities rallied across the board led by advances in Oil and Gold thanks to intensified geopolitical unrest as Ukraine sent US-made missiles into Russian territory — a move Russia warned would have consequences.

Markets rallied strongly post-election, buoyed by optimism surrounding a new Pro-Growth era under the incoming administration. Adding to the momentum was last week’s .25% rate cut by the Fed along with the Fed Chair Jerome Powell’s upbeat comments about the economy, coupled with his acknowledgment of “significant progress on inflation”. Powell also hinted at the possibility of another rate cut in December, noting that policy remains restrictive despite the latest adjustment.

Markets rallied strongly post-election, buoyed by optimism surrounding a new Pro-Growth era under the incoming administration. Adding to the momentum was last week’s .25% rate cut by the Fed along with the Fed Chair Jerome Powell’s upbeat comments about the economy, coupled with his acknowledgment of “significant progress on inflation”. Powell also hinted at the possibility of another rate cut in December, noting that policy remains restrictive despite the latest adjustment.

We have another busy week of earnings ahead, along with the elections on Tuesday and the Fed meeting on Thursday. The current odds are fully suggesting the Fed will cut rates by .25%, but all eyes will be analyzing what the Fed sees for future rate cuts. We will also get a peek at business conditions with Tuesday morning’s S&P Global and ISM PMIs.