what does move markets this week we got an array right we got data whats going on with russia we have china data we have a positioning one mahajan is senior investment strategist at edward jones moment whats your call yeah look you know i think im looking at a couple of things this week first and foremost the inflation data that we get at the end of the week on friday core pcg which historically has been the feds preferred inflation metric we get a nice read for the month of may once again if it does hold in line with the trends we saw in both cpi and bpi well hopefully get a bit of a surprise to the downside and inflation the other one im watching closely housing data we get case shiller home price index data this week as well i think its tuesday keep in mind housing and junk shelter and rent broadly have been a little bit stick your parts of core inflation as well so part of this inflation story is that over time we think the real time view of whats happening in housing shelter rent all cooling in real time will over time show up in the inflation data as well so i think this this week a case shiller price index should continue to move lower which of course supports the case for better core inflation going forward do we not know enough about what is happening in russia to factor it into our thinking theoretically this could have a major impact on the global economy but its all theoretical we dont know yet and as a result of which too i just pocket put it to one side dont worry about it and move on yeah yeah i think you kind of summarized it well look weve been dealing with the ukraine crisis for over a year now since february of 2022 it did have a pretty immediate economic implication through the commodity markets you know we saw oil energy prices spike higher we also saw supply chain pressure indexes move higher as well as global supply in that region contracted as well those were major implications immediately from the ukraine crisis but over time weve seen those dissipate as economies around the globe worked around that crisis we do think markets are on wait and see move wait and see mode for what happens next but for now it is very difficult to handicap a geopolitical move it becomes a tail risk more than a base case and we do think over time hopefully this crisis moves in the right direction i think that is the hope of of markets around the world that we get a resolution rather than a more severe outcome but but but mona laurie covid rts pointed this out like yes and the geopolitical risk tension comes in at an exact point where sentiment indicators are increasing to the upside retail investors also got in and the summer seasonally is not great for equities so just compound repositioning yeah you know look i think we had a really nice run in the first half of the year were heading towards second half believe it or not but the s  p 500 is up about 14 percent yes its been driven by a very narrow set of leadership its a i enthusiastic led trade here but we are starting to see a little bit of broadening you know areas like industrials and materials a typical cyclical sectors have started to show better performance as well small caps started to make a rebound as well so we are starting to see a little bit more hope form in the market but we do think to your point were heading towards the second half where we have to have some questions answered here and those questions are largely around what happens to the us economy you know of course many indicators are pointing pointing to softening including the ise ms yield curves some of the conference board leading economic indicators for example but you know we do think some of that softening as we talked about has been priced in when we saw that 25 percent drawdown last year so well markets kind of breeze through a period of cooling maybe not but that could be an opportunity we think to position for better returns ahead okay so what youre saying is you want to buy the dip when it comes is that right can i just fill it down to that you know i think that that is a summary of what we would think about when we think about 2024 you know we see better earnings earnings forecasts ahead we think earnings will rebound wed see better inflation metrics ahead and we see a fed that has told us its not only stepping aside in 2020 for it ill start cutting rates as well so that backdrop seems more promising to us so as we head towards the back half of the year in any given year one to two corrections are the norm if we get any of those we think start positioning for a broader market rally ahead not just a narrow narrowly led market but also bonds we think start becoming much more interesting in that backdrop as well so i wonder guy if the rotation that we saw last week a bit with actually the week before where you would cyclicals industrials you had small caps kind of doing better yes last week didnt really count if we just look through it for a second is that become and then trade more to the second half maybe but to voters point maybe you get maybe you get a big sell down in the middle of all of that and thats the moment you want to be getting in theres still tons of money alex and tons of money in money market accounts and nobody can quite figure out yet where they want to deploy that money because they getting paid to wait how much longer do you want to wait well i wanted to that point that money in money market funds what market does that belong to yeah its a great point look we think that money in money market funds needs to start getting deployed over the next six to 12 months and i think it goes to both markets i think it can go certainly the longer duration bonds you know the short duration trade has worked really well thus far but when you think about it were probably heading towards some sort of peak in fed funds which means a peak in treasury yields as well and thats a great time to extend duration you not only lock in some of the better yields but then over time you get price appreciation if yields you know over time the fed pivots lower as well and then we talked about the equity trade so we think you know its not a wholesale trade out of your money market funds but start thinking about complementing cost averaging in across the board you dont want to be stuck trying to reinvest in the environment of lower rates as well how do you sequence that money do you how far away are we from the best rate youre going to be getting on the 10 year how far away are we from the best rate youre going to be getting on the two year is that still to come or do you think that is priced now yeah you know historically and weve run some numbers on this its about six weeks ahead of when the fed funds rate peaks is when treasury yields tend to peak as well so you know we could be really talking about the weeks ahead where we start to get the peak in treasury yields and markets are of course notoriously difficult to time at the top or the bottom but we certainly think think thinking about this trade in the weeks ahead makes a lot of sense you know we think the fed will go one more in july probably leaning towards a pause after that but of course very data dependent and so were really talking about yield environment thats looking to top out in the weeks and really months ahead and so i think that is the opportunity you know when we think about their duration trade for for many times were neutral but really when you want to get involved is when you see these inflection points and we have one inflection point the fed moving to the sidelines but the bigger inflection point is when the fed pivots lower