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Economy

It’s Not Like Gymnastics: The Economics Of Soft Landings

Hopes of a soft landing for the US economy will intensify over the coming months, allowing equities to rally. However, even if an equilibrium of high employment and low inflation is reached, it will be difficult to keep the economy there. Investors should remain tactically bullish on stocks but look to turn defensive in the second half of 2023.

Global Investment Strategy by Peter Berezin
Do US Job Cut Announcements Presage Aggregate Labor Market Deterioration?
Last week, 190 thousand initial unemployment claims (IUC) were filed in the US, below expectations they would increase from the prior week’s 205 thousand. On a 4-week moving average basis, initial unemployment claims have now reached an 8-month low,…
Daily Insights
Hawkish ECB Minutes Underscore Risk Of Policy Mistake
The tone of the minutes from the ECB’s December meeting was decidedly hawkish. The release emphasized that Governing Council members agree that the tightening cycle is far from over given their view that risks to the inflation outlook are skewed to the…
Daily Insights
CRB Raw Industrials/Gold Ratio: A Warning For Cyclicals/Defensives?
The signal from commodity markets warns against the durability of the outperformance of US cyclical equities relative to defensives. In particular, while most commodities have benefitted from a weakening dollar in recent months, the CRB Raw Industrials…
Daily Insights
Core Inflation Will Fall In EM

In EM ex-China, growth will continue decelerating. Some economies will experience an outright recession, while most will have a growth recession. Nearly every single economy will experience a cyclical drop in inflation (with the exception of Turkey).

Emerging Markets Strategy by Arthur Budaghyan
Oil Prices Set To Rally

China’s re-opening – powered by the fiscal and monetary stimulus required to achieve at least 5% real GDP growth after flattish 2022 growth – and a weaker USD will catalyze demand growth this year and next, lifting global oil consumption by close to 2mm and 1.7mm b/d in 2023 and 2024. We lowered our Brent forecast slightly for this year to $110/bbl, and expect 2024 prices to average $115/bbl. WTI will trade $4-$6/bbl lower.

Commodity & Energy Strategy by Ashwin Shyam
US Retail Sales, Manufacturing Production Disappoint In December
Preliminary estimates indicate that the value of US retail sales fell by a larger-than-expected 1.1% in December following a downwardly revised 1% decrease in November, marking the largest monthly decline since December 2021. Department stores (-6.6% m/m),…
Daily Insights
BoJ Leaves Policy Unchanged
After having unexpectedly doubled its Yield Curve Control (YCC) cap on 10-year government bond yields from 0.25% to 0.5% at its December meeting, the Bank of Japan (BoJ) did not adjust its policy further in January. Instead, the monetary policy statement…
Daily Insights
Beige Book: Weak Growth, Easing Inflation, Resilient Labor Market
The Fed Beige Book continues to provide a somber outlook for the US economy. It highlighted that “overall economic activity was relatively unchanged since the previous report” and that “contacts generally expected little growth in the months ahead.” In…
Daily Insights
US Gridlock Has Been Good In Modern Times But Not All Times
According to BCA Research’s US Political Strategy service, the US political and geopolitical context has not yet verifiably improved, and they doubt it will prior to 2024. Any market rally will be capped at an unexpected time over the coming months. The US…
Daily Insights

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