The US economy is not in recession, but is suffering from a post-pandemic stimulus hangover. The cure: lower interest rates. We expect the Fed to start lowering rates, which will benefit both equities and bonds. We upgrade stocks to…
Tech-led momentum is driving the S&P 500 to new highs despite weak growth and rising cyclical risks. The rally has accelerated following a de-escalation in geopolitical tensions and ongoing hopes for positive trade developments.…
Regional Fed surveys confirm sluggish US manufacturing and tame inflation, supporting long duration positioning outside the US. The June Dallas Fed Manufacturing survey missed expectations, rising to -12.7 from -15.3, still deep in…
Our US Bond strategists expect a modest narrowing of the Treasury/OIS spread, supporting a cyclical long-duration stance and 2s10s steepeners. Over the past year, the spread has added roughly 30 bps to the 10-year Treasury yield,…
Weak consumption data and deteriorating labor market signals reinforce our defensive stance. The May US Personal Income & Outlays report showed real personal spending declining 0.3% m/m, missing expectations, while core PCE…
Foreign investors are selling US assets. Our Chart Of The Week comes from Juan Correa, Chief Global Asset Allocation Strategist. Splitting cumulative year-to-date EUR/USD returns by trading session reveals a clear pattern:…
Investors should modestly underweight equities in their portfolios and look to turn more aggressively defensive once the whites of the recession’s eyes are visible. We think that will happen within the next few months.
In Section I, Doug underscores that the full weight of tariffs has yet to be felt on the US and global economies, against the dangerous backdrop of a softening labor market. In Section II, Jonathan presents the bullish case for the…