Stocks closed mostly higher yesterday with the Dow leading the way. They were up 1.47% and made a new YTD high in the process.

Big moves from Salesforce (+9.36% yesterday), UnitedHealth Group (+3.36%), and Boeing (+3.21%) definitely helped.

The Dow is now up 8.46% for the year. Even though they made new highs for the year yesterday, the S&P is up 19.0% YTD, and the Nasdaq Composite is up 35.9%. (The Nasdaq 100 is actually up 45.8%.)

Yesterday's Personal Consumption Expenditures (PCE) index confirmed that inflation continues to decline. The headline number showed inflation was flat last month at 0.0% vs. last month's 0.4% and the consensus for 0.0%, while the y/y rate came in at 3.0%, down from last month's 3.4% and below views for 3.1%. The core rate (ex-food & energy) was up 0.2% m/m vs. last month's 0.3% and estimates for 0.2%. The y/y rate came in at 3.5%, down from last month?s 3.7%, and in line with the consensus.

It was a fine report. And echoed what the CPI and PPI reports showed two weeks ago – that inflation continues to ease.

And it further underscored the idea that the Fed is likely to pause at their next announcement on rates on 12/13 (and possibly call it quits afterwards)?

What investors are really interested to learn is when the Fed expects to pivot to cutting rates next year, and by how much.

At the moment, we know the Fed has previously said they expect to cut rates by -50 basis points in 2024. But more and more Fed watchers are expecting 5 quarter point rate cuts next year (with some calling for even more -- UBS is expecting a -275 basis point cut).

Before that though, we'll get the Employment Situation report next Friday on 12/8. The Fed has been looking at that as a proxy for the economy, and average hourly earnings as a barometer of inflation (wage inflation).

Employment has been resilient, but is finally easing (which suggests the Fed's rate hike cycle is having an impact). And wage growth has moderated as well (which shows yet another component of inflation is easing). All good signs.

In other news, yesterday's Weekly Jobless Claims rose by 7,000 to 218K vs. views for 219K.

The Pending Home Sales Index slipped -1.5% m/m vs. last month's 1.0% and the consensus for -2.0%. The index itself came in at 71.4 vs. last month's 72.5.

And the Chicago PMI rose to 55.8 vs. last month's 44.0 and estimates for 45.1.

Today we'll get the PMI Manufacturing Index, the ISM Manufacturing Index, and Construction Spending.

We'll also hear from Fed Chair, Jerome Powell, as he participates in a discussion at Spelman College, in Atlanta, GA in the morning. And then again at a roundtable discussion, along with Fed Governor, Lisa Cook, in the afternoon.

No new ground is expected to be broken at today's events. But you can be sure his comments will be closely followed regardless.

The Q4 rally is firing on all cylinders.

And with one more month to go, expectations are high that we'll finish the year strongly.

Best,