The global economic cycle may be due for a rebound. As September ends, the S&P, DOW, and NASDAQ are all up more than 1.5 percent on the month. And stocks in China surged over 8 percent for the country's best day in 16 years. So, going into Q4, where do we go from here? Back on the show today to unpack the latest market action is Fidelity Director of Global Macro Jurrien Timmer. Jurrien explains the complexities surrounding the concept of R-Star, the neutral interest rate, and emphasizes the challenges in determining whether the Federal Reserve's policies are restrictive or neutral, given the current economic context. Referencing plenty of economic data as usual, he highlights that the markets appear to be pricing in a soft landing scenario, with stable fundamentals and increasing earnings growth, while uncertainty about the upcoming U.S. elections adds complexity to market leadership. Jurrien and host Pamela Ritchie also discuss shifts in the labor market. The key question seems to be whether the Fed can maintain the current balance in the labor market without triggering a more significant economic downturn, as shifts in employment rates could lead to a different phase in the economic cycle. 

 

Recorded on September 30th, 2024.