'I want the best of both worlds and honey, I know what it's worth'

Having seen Sammy Hagar & Co in concert Saturday night playing a bunch of Van Halen songs (Loverboy opened up and I'm staying long Live Nation stock with the crowd 17,000 strong), the markets are certainly hoping that the Federal Reserve this week and through the rest of the year delivers the Best of Both Worlds. That being rate cuts along with the paradise of further inflation moderation and a stabilized economy around the current 2% growth level. So easy, right? With expectations already priced in for further cuts in 2025, what would upset that paradise would be if the economy slows further coincident with a continued rise in the unemployment rate as rate cuts may not be enough to stave that off. That's when bad news is bad news for stock and credit markets.

"I want the best of both worlds and honey, I know what it's worth. If we could have the best of both worlds we'd have heaven right here on earth."

"You don't have to die and go to heaven or hang around to be born again. Just tune in to what this place has got to offer 'cause' we may never be here again."

In case you missed these comments from the UoM in Friday's Succinct Summation, they highlight the importance of the stock market to consumer confidence for the part of the population that owns stocks. "The fact that sentiment has moved little over the past three months obscures substantial variation in attitudes across the population...Not surprisingly, consumers with large holdings (of stocks) tend to exhibit higher levels of sentiment than those with smaller (or no) holdings, due in part to the financial security and purchasing power afforded by more wealth," said UoM. I'll add, this interrelationship, this wealth effect, can be the dividing line between economic expansion and contraction as the higher income consumer is holding the US economy on its shoulders right now, along with all that government spending, though the multiplier effect on that government largess is usually less than zero. 

We've seen the spike in container shipping rates and the flow thru to air cargo rates continues according to World ACD. They said Friday, "Air cargo spot rates from Asia Pacific continue to soar, despite a drop in demand from China to the USA in the last two full weeks, according to the latest weekly figures and analysis from WorldACD Market Data."