The best leading indicator for post-pandemic US wage inflation is the ratio of job vacancies to ‘bad’ unemployment (V/U), where bad unemployment refers to ‘job losers not on temporary layoff’. This…
US corporate bonds performed well last year with both investment grade and high-yield spreads narrowing in 2023. Indeed, the 12-month breakeven spreads are relatively low – especially in the case of investment grade.…
US CPI inflation for December came in slightly hotter than anticipated. Headline inflation accelerated from 0.1% to 0.3% on a month-over-month basis and rose from 3.1% to 3.4% on a year-over-year basis. Both the monthly and…
We update our inflation forecast following this morning’s CPI report.
Crude oil prices weakened following the release of the US EIA’s weekly report on Wednesday, reversing gains earlier in the session and ultimately ending the day lower. The data release showed commercial crude inventories…
The Atlanta Fed’s US Wage Growth Tracker stalled at 5.2% in December, unchanged from November. Notably, after falling from a peak of 7.1% in June 2022, this indicator has stabilized at still-elevated levels in recent months…
The Fed faces a dilemma. Cut rates early to avoid a recession, but at the risk of not slaying wage inflation. Or, not cut rates early to ensure that wage inflation is slayed, but at the risk of a downturn. Faced with such a dilemma,…
BCA Research’s US Bond Strategy service recommends investors keep portfolio duration close to benchmark for now. They will increase rate exposure as the labor market downturn worsens. Treasury yields are up slightly to…
After sinking to a low in October last year, the S&P 500 rallied by 15.84 % by year end, but that rally has faded in the new year. Against the backdrop of increasing belief in the soft-landing narrative, this correction has…
The Santa Claus rally started in late October lifting the S&P 500 by 15.8%. However, there are signs that the rally is getting tired. Consider the following: The S&P 500 has been trading at around 4,750 since the…