Insights Weekly Research Briefing

There are now eight S&P 500 components with market capitalizations greater than $1 trillion and five of them hit all-time highs on Monday. U.S. equity valuations are near all-time highs while credit spreads are near all-time lows. This looks to be the best of times for the markets as we move into the year-end holidays. Time to get out the Santa Clause rally cap?

Nothing better than a year end wedding. Holiday decorations, large gatherings and very festive moods. From looking at the news tape this weekend, the mergers continue to extend into the corporate space.

For the second straight month, the core PCE inflation data came in a bit warmer than expected. The Fed's Waller said on Monday that he still supports a December cut, but if other FOMC members wanted to begin wavering about future cuts, now could be a good time.

With President Trump's election honeymoon over, we now get to see if what was said on the campaign trail stays there or if it will actually be implemented. The incoming President wasted no time last week in testing his mandate by announcing several controversial cabinet nominees and tweeting multiple potential policy ideas.

Not even close. Congrats to Team Red for figuring out what American citizens wanted and what they didn't. The full GOP sweep in Washington D.C. will lead to new excitement and stimulus which is why the equity and credit markets are reacting so positively.

The fork in the road ends this week. After Tuesday, Americans will have selected their future government and the elected politicians will need to find ways to work together to make things better for its citizens. ANY certainty after the election will be a good thing as consumers, business owners and investors will be able to adjust planning for their futures. It is time for "election uncertainty" to disappear from all the business surveys.

If you are a team sports fan, this is your week. World Series, NFL, NBA, NHL, College Football and Global Soccer to fill all 24 boxes of your ESPN+ screen. If you are a political junkie, this is also your week as the candidates make their final pitch into next week's final decision.

The early third quarter earnings reports have delivered solid numbers, and the beating stocks have responded with their best gains in years. This is a positive sign of a healthy financial market. Looking ahead, the mutual fund tax related selling peak will end on Halloween.

The good news for financial risk taking grew louder last week as better than expected earnings, a pickup in M&A activity, and the successful launch of several IPOs hit the market. While it was only week one of the Q3 earning season, most all of the reporting names have a higher stock price today than before the report. The big banks delivered as did Delta Airlines and Pepsi.

Nothing like a positively surprising set of economic numbers to put everyone in a good mood. The 4.05% unemployment rate combined with a +100k beat in the non-farm payroll figure is going to put the Fed's dour year end jobs projections in jeopardy. Say goodbye to any thoughts of a 50 basis point rate cut in November.

So much for a weak September for the stock market. I count only 8 down days out of 20 for the S&P 500 index. September will also make the 5th positive month in a row, and the 10th gainer out of the last 11 months. What is not to like?