The risk of a recession in 2023 is being supplanted by the risk of another inflation wave. We will turn more defensive on equities if it continues to look like inflation is making a comeback.
Investor sentiment on China and EM has become bullish. Meanwhile, the reflation plays have begun fraying on the edges. Cracks always appear first in the most sensitive reflation plays and then spread to the core. The narratives of…
We recently highlighted that some Asian trade data – New Export Orders from Taiwanese and South Korean Manufacturing PMIs as well as Taiwanese Export Orders – are sending a less pessimistic signal about global…
The Fed is betting that the usual non-linearity of unemployment is different this time, but so far, there is nothing to suggest that it is different. We discuss the key signposts to watch out for, plus the implications for interest…
The ISM PMI delivered a positive signal about service sector conditions in the US. The headline index jumped six points to 55.2 – returning to expansionary territory and beating expectations of a milder increase to 50.5.…
PMIs suggest that the pace of decline in manufacturing activity slowed in January. The Global Manufacturing PMI ticked up to 49.1 from 48.7, indicating that the rate of contraction eased last month. Notably, the improvement…
When does rising unemployment become a bigger problem than inflation? The Fed won't cut rates until that happens, probably thwarting market hopes of big cuts in 2H.
US equities have been underperforming their US peers over the past few months. Relatively more attractive valuations in both the Euro Area and EM, as well as an improvement in the economic outlook, have contributed to this…
Evidence of easing inflationary pressures – as well as favorable economic developments in Europe and China – are boosting investor sentiment and supporting US equities. Yet, this stock market behavior also reflects an…