Watch Out for the Lags From Rental Rate Deflation

Falling rental rates will continue to push down headline inflation…

Highlights

• Falling rental rates will continue to push down headline inflation…

• … acting as a big surprise to the consensus view (and the Fed)

• The S&P 500 has been flat since November, breadth is narrowing, and Treasuries look oversold

• The loonie pops on Trudeau’s resignation, but the BoC has a long easing road ahead

Key Takeaways

Stagnant S&P 500 Performance and Weak Breadth

• The S&P 500 first crossed the 6,000 mark back on November 11^th, less than a week after the Trump electoral victory and has made zero headway since. The NYSE Composite finished below its 50-day moving average for a 16^th straight session. Breadth was negative on the NYSE to boot — losers topped gainers by close to a 4-3 margin.