Negative Data Shock Out Of Germany Sends Euro Closer to Par

ECB rate cut expectations rise and the euro falls on recessionary data

Highlights

• ECB rate cut expectations rise and the euro falls on recessionary data

• Equity market broadens out despite a dismal performance from the Magnificent 7

• Consumer frugality/value-seeking theme intensifies as retail and fast food price wars heat up

• Our tactical cash call boils down to two words – the Fed

Key Takeaways

Rally Beyond the Magnificent 7

• Who would have thought we could see a rally like we did yesterday with the Magnificent 7 on its heels. There was a clear broadening out, and 9 of 11 sectors in the S&P 500 finished higher. Market strength was clear outside of the megacaps, but this remains the third biggest equity price bubble in the past century and sentiment is off the charts bullish.