The Fed's 'buy everything' party fuels a cross-asset rally

The Federal Reserve's accommodative stance and indication of potential rate cuts have fueled a market rally, with the Dow Jones hitting record highs, gold surpassing $2,000 an ounce, and bitcoin rising. While stocks are pricing in a Goldilocks scenario for 2024, where growth slows but avoids a recession, bonds are embracing the prospect of significant rate cuts. However, concerns arise as 150 basis points of cuts may be ambitious given the robust labor market and healthy consumer spending. Additionally, there is a significant amount of cash parked in money market funds that will eventually seek investment opportunities. The S&P 500 is up 23% this year, largely driven by tech megacap stocks, while the equal-weighted S&P has underperformed. The mood in the market remains positive, with futures pointing to an upbeat start on Wall Street.