November was a pivotal month for the financial markets. Despite concerns of higher for longer interest rates and 3Q GDP rising at its fastest pace (+5.2% YoY) in nearly two years, growing expectations of a Federal Reserve (Fed) pivot next year as the economy and inflation slow led to a broad-based rally across nearly all asset classes – ranging from Treasurys, to corporate credit, emerging markets and equities. In fact, November’s financial markets’ performance was one for the record books. The bad news: We do not expect the pace of these gains to continue. But the good news: We forecast that both equity and fixed income markets will move higher next year based on slowing inflation, Fed cuts, and a second half economic recovery. Here’s a quick recap of key market events in November:
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