The stock market will suffer a setback from the weakening labor market and a rebound in US and global policy uncertainty.
The CBOE VVIX index (expected volatility of the VIX) dropped to a nine-year low of 73.26. A low VVIX index suggests subdued demand for VIX call options which are typically used to bet against significant market declines.…
The 3-month moving average of the unemployment rate has been a reliable US recession indicator. Indeed, there has never been a case in the post-war era when it has increased by more than a third of a percentage point from its…
US retail sales remained unchanged in April, a downside surprise from expectations of 0.4% m/m growth. Notably, the retail sales control group (an input to GDP) declined by 0.3% m/m despite expectations of mild growth and all of…
US headline CPI inflation decelerated to a softer-than-expected 0.3% m/m (3.4% y/y) in April, from 0.4% m/m (3.5% y/y). Core CPI eased from 0.4% m/m (3.5% y/y) to 0.3% m/m (3.4% y/y). Declines in new (-0.4% m/m) and used…
Our updated views on Treasury yields and Fed policy following this morning’s CPI report.
Canadian equities have lagged their US counterparts for over a decade. Sector composition largely explains this underperformance. Banks and natural resources stocks are overrepresented in the TSX while the US stock market is…
Investor and business sentiment continues to improve in the Eurozone. The ZEW Expectations series for the Eurozone (+3.1 to 47 in May) and Germany (+4.2 to 47.1, above expectations) strengthened to 27-month highs. Moreover, the…
Despite historically high interest rates and the fact that variable-rate mortgage issuances dominate the mortgage market landscape, Australian home prices continue to climb at a close to double-digit annual rate. The Core Logic…