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Labor Market

May JOLTS data suggest labor market softening beneath the surface, reinforcing a defensive stance across portfolios. Job openings rose to 7.7m from 7.4m, beating estimates, while quits ticked up to 3.3m and layoffs fell to 1.6m. However, hiring edged lower to…

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 US dollar over the coming year.

In Section II, Jonathan presents the bullish case for the US dollar over the coming year.

Weakening consumer confidence and fading labor momentum support a long duration stance as inflation fears recede. The June Conference Board Consumer Confidence index dropped 5 points to 93.0, missing expectations. Both present conditions and expectations…
European central banks are pivoting quickly amid deflationary pressure, reinforcing our long UK Gilts and short GBP trades. The Norges Bank surprised with a 25 bps cut to 4.25%, abandoning its hawkish stance. The Swiss National Bank cut by 25 bps to 0%, in…
1 US Retail Worries …

Following a rapid-fire review of issues related to household balance sheets, durable goods demand, the impact of tariffs, DOGE’s capacity to move the budget needle and the labor market’s ongoing cooling, we reiterate our defensive asset allocation recommendations.

1 How Tight Is The Labor Market? …

Provided that humanity can overcome the existential risks posed by AI, real incomes will rise. Although most workers will ultimately gain from the transition to an AI-dominated economy, the biggest winners will be those who control the land and the natural resources beneath it.