Macro-economic data continue to be mixed with strong Q3 real GDP growth but some early signs of a softening labor market. Treasury yields have been on the retreat since mid-October when the 10-year pierced the 5% level. Yields on the long end fell the most. Investors comfortable with duration risk may consider moving further out the curve as the US Federal Reserve nears (or is at) the end of the tightening cycle. Equity earnings were modestly positive for the first time in several quarters, but valuations have run far ahead of earnings growth, expanding the S&P 500 Forward P/E to nearly 19x from 16.7x at the start of the year.
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