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With Thanksgiving behind us and Christmas ahead, we're in the peak of holiday seasonality, which tends to be constructive for the market. The question is how much of those returns have been pulled forward with the significant rally we've just seen?
The Big Picture
There are signs that inflation and the economy may begin to slow, including ISM manufacturing prices paid dropping into contraction (as well as ISM manufacturing at the headline level slowing again).
This slowing is expected to impact multiple sectors as we see broader S&P 500 earnings revised down 3% and consumer discretionaries down 5%.
Earnings calls for S&P 500 companies have been mentioning AI less and less. Is this a sign that we're moving past the hype bubble? I'm still waiting to see broader signs of productivity increases being experienced and directly attributed to AI.
Markets and Mayhem
The Magnificent Seven have led the market higher this year, contributing to the bulk of S&P 500 YTD gains, with the other 493 only adding just over 3%.
