Carlsquare weekly market letter: Busy week. Fed could surprise the market

Read the weekly market letter here:

Carlsquare weekly market letter

• The Fed is behind the curve again. They have positioned themselves in a hole where the market expects a move that signals lower rates. If they stick to the last script of “higher for longer”, the market may turn sour today when the Fed releases its new statement. If so, this could be a buying opportunity as we still believe in the Santa Claus rally
• It is a heavy macro week overall, starting with inflation yesterday and today and the Fed meeting tonight – and ending with the quadruple witching on Friday in the options market. So, there is a lot of implied risk in the market this week, setting the table for a smoother and more lazy market into Christmas and the new year

The chart below shows the US 10-year Treasury yield in a 60-minute chart, falling in a clear channel. If this channel holds, the stock market can rally.

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