In Section I, Doug weighs the recent reduction in trade uncertainty against the clear signs of labor market and consumer weakness. In Section II, Jonathan reviews the US fiscal outlook in the wake of the passage of the OBBBA.
June US income and spending shows softening demand and rising goods inflation pressure, reinforcing our long-duration stance. Real personal spending only rose 0.1% m/m, in line with expectations. Personal income increased 0.3% m…
We will only move to a fully defensive stance if the “whites of the recession’s eyes” appear. So far, they have not. We will be increasingly looking to our MacroQuant model for guidance on when the next turning point in markets may…
Although we think the economy is weaker than investors realize, it has remained resilient and we will not fight the tape forever. If clear signs of a recession do not emerge over the next six weeks, we will drop our defensive…
Consumer sentiment improved modestly in July, but remains at levels that still point to subdued spending, reinforcing our defensive stance. The preliminary University of Michigan index rose to 61.8 from 60.7 in June. Expectations…
June US housing data surprised to the upside, but the broader sector is still weak, reinforcing our modest underweight on equities. Housing starts rose an annualized 4.6% m/m, and building permits ticked up 0.2% after a 2.0%…
Jay Powell won’t be removed as Fed Chair before the expiry of his term next May, but we will learn the identity of his replacement this year, setting up a potentially awkward “shadow Fed Chair” situation.
June retail sales beat across the board, but inflation and a slowing trend reinforce our defensive stance. Headline and core retail sales rose 0.6% m/m, while the control group climbed 0.5%. Spending on food services and drinking…
We will abandon our recession call if US economic data show clear signs of stabilization over the summer months. For now, that has not happened. Maintain a modest underweight to stocks but look to get more defensive if MacroQuant’s…