Bloomberg Surveillance Eco Data and Policy Shaping Markets
Jan 14, 2025
Jurrien Timmer, Director of Global Macro at Fidelity Research, and Sarah House, Senior Economist at Wells Fargo, dive into how eco data influences market dynamics. They explore the equity bull run and its slow start to 2025, discussing rising Treasury yields and their impact on investor sentiment. The intricacies of measuring inflation through CPI and PCE are unpacked, highlighting the Fed's strategies in response to fluctuating economic indicators. The duo also emphasizes the importance of integrating sustainability into policymaking for effective market shaping.
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Nifty Fifty Valuations
- The "Nifty Fifty" top companies aren't at extreme valuations like in the past.
- Their price-to-earnings ratios are elevated but supported by accelerating earnings estimates.
Market Breadth Concerns
- Market breadth narrowed significantly in December 2024, resembling 2023.
- Despite S&P gains, participation beyond the "Magnificent Seven" is limited.
10-Year Treasury Impact
- Rising bond yields create competition for equities, impacting market sentiment.
- As bonds become more attractive, stocks must compete, potentially causing market wobbles.