Stocks are hovering near record levels as investors cheer the Fed’s dovish tone and anticipation for rate cuts next year. This is why the 10-year yield dropped below 4%.

On the economic front, there are more signs inflation is cooling down, as US import prices declined 1.4% y/y.

And because of this morning’s retail numbers, the Atlanta Fed is now predicting real Q4 GDP to rise 2.5% vs. 1.2% prior.

Utilities are under pressure, while the rate-sensitive real estate sector leads.

The market seems to have hit an air pocket, pulling back from the high, but this shouldn’t be surprising given the gains since late October.