Chicken or egg...

Chart title here implies that rate cutting cycle drives stock performance after a cut ... I would take issue with that - the expectation of a rate cutting cycle drives stock prices before the first cut  ... the rate effect fades post cut and the driver becomes realised earnings...Equally the chart suggests that slow cuts are better than fast ones ... again I'd say that the reason the stock market is strong has little to do with the slow pace of the cuts at this point - it has everything to do with the pace of GDP growth and earnings which are always going to be higher when rates are being kept high in response to strong growth (and inflation risk) ...In the same vein fast cutting cycles are a symptom of looming recession risk ... so stock performance will inevitably be weak in response to uncertainty around the operating fundamentals ...we need focus on causation and not correlation ...