Mounting evidence that the labor market is on its way to cracking checked two more boxes on our checklist, driving us to tactically downgrade equities to underweight while upgrading fixed income to overweight. Our tactical and…
July nonfarm payrolls expanded by 114 thousand workers, a sharp slowdown from June’s downwardly revised 179 thousand, and significantly disappointing expectations of 175 thousand. The unemployment rate unexpectedly edged…
The ISM Manufacturing PMI disappointed in July. The headline index declined at a faster pace, from 48.5 to 46.8, disappointing expectations and extending a four-month contraction streak. Details were uninspiring. New orders…
The Sahm Rule – a widely watched real-time recession indicator – signals the early stages of a recession when the 3-month moving average of the unemployment rate rises at least half a percentage point above its past…
A decisive risk-off mood dominated markets at the end of last week, amid disappointing payrolls, tech earnings and manufacturing PMIs. The Nasdaq and other tech-heavy stock markets such as Japan, Korea and Taiwan led the equity…
No clear risk-on/risk-off pattern emerged from July’s market performance data. On the one hand, consistent with a risk-off environment, US bonds ranked highest in the monthly return distribution, while pro-cyclical…
The Bank of England (BoE) lowered its policy rate by 25 basis points to 5% at its meeting on Thursday. While the move was expected, the governing board was split, voting 5 – 4 in favor of reducing the key interest rate.…
The market is pricing in a soft landing, but we see growing signs that the global economy is faltering. Investors should be defensively positioned.
We assess the investment implications of the BoJ and Fed meetings, and give our take on the next policy moves. We also assess the impact on asset markets.
Eurozone headline CPI inflation unexpectedly accelerated in July, from 2.5% y/y to 2.6%. Core CPI remained stable at 2.9% despite expectations it would ease. EU Harmonized CPI accelerated in the regions’ three largest…