Labor Market
1 in 17 older Americans workers have gone missing either through ‘excess retirements’ or ‘excess mortality’. The consequent dislocation of the labour market means that the Fed’s work is not yet done. We go through some investment implications. Plus: the China and Japan rallies are exhausted.
Although the comprehensive economic surprise indexes continued weakening in May, the metrics in our equity downgrade checklist haven’t softened enough to check more boxes now. While we continue to expect the US economy will enter a recession before year end, it is not yet certain and we remain tactically neutral.
The ECB is now firmly in easing mode, even if it refuses to pre-commit to a specific rate path. What does this data dependency mean for the euro and European yields?
US Treasury yields bounced after this morning’s employment report. We offer our updated views about how long the recent trading range will hold.
The US economy remains on a path towards a recession, most likely starting in late 2024 or early 2025. For now, investors should maintain a benchmark allocation to equities, but employ a barbell strategy of overweighting defensives and materials.
The US economy is in the “Overheating” phase, so stronger growth brings higher inflation. Tight monetary policy means recession is still likely over the next 12 months. Stay defensive.