In this video we discuss the outlook for interest rates and the S&P500. The video focuses on a topic from a recent edition of the Weekly Macro Themes report. The discussion focuses on when and how Fed rate hiking cycles impact on the S&P500 - that is, what types of conditions and signals typically drive either a correction or a bear market. Our view is you need to look at it from 3 separate angles. 1. The level of interest rates (the higher the worse). 2. The rate of change in interest rates (the more rapid the rate hikes the worse). 3. The level of interest rates relative to wage growth (the more negative the spread the worse). At present neither of these signals are lighting up in a material manner but as noted in the video, they are worth monitoring in order to gauge the risk outlook.
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