Recession-Hard/Soft Landing
Growth in US disposable income has outpaced inflation nearly every month since mid-2022. Consumption is principally driven by income, but in the US it has gotten a meaningful assist the last two years from the drawdown of excess savings accumulated over the…
The S&P 500 has started off the new year on a weak footing, dropping by 1.5% in the first week of January. Indeed, by the end of 2023, several indicators were warning that conditions were becoming bearish. In particular, investors have…
According to BCA Research’s Global Investment Strategy service, the risk of a second inflation wave has gone up. Until last December’s FOMC meeting, the team’s bias was to think that the Fed would cut rates too slowly. While the release of the Fed minutes…
At first blush, the US establishment survey delivered a positive surprise on Friday. The increase in US nonfarm payroll employment jumped from 173 thousand to 216 thousand in December – beating expectations of 175 thousand. Wage growth also surprised to the…
Friday’s Eurozone CPI inflation report was in line with consensus estimates. Headline inflation reaccelerated from 2.4%y/y to 2.9%y/y in December, in part reflecting the impact of the end of energy subsidies in Germany and France. The pace of energy deflation…
Following today’s US jobs data release, the Joshi rule real-time US recession indicator inched up to 0.18 and is now just a whisker from its recession event-horizon of 0.20.
A soft landing can be achieved but not maintained. We are cutting our tactical recommendation on stocks from overweight to neutral and scaling back our long-duration stance.
Minutes from the Fed’s December 12-13 FOMC meeting suggest that policymakers are more confident that inflation is on track to return to target. While they continued to note that inflation remains elevated and that they are highly attentive to inflation risks,…
According to BCA Research’s European Investment Strategy service, the euro has ample attractive features that justify a positive long-term outlook. However, its pro-cyclicality and the dollar’s negative correlation to risk assets constitute important…
Results of the November JOLTS survey indicate that the US labor market is softening. The number of job openings slowed from 8.85 million to 8.79 million – the lowest since March 2021 and slightly below expectations of 8.82 million. This brings the ratio of…