Recession-Hard/Soft Landing
US small-cap stocks have underperformed significantly this year. While the S&P 500 price index is up 14.0% year-to-date, the S&P 600 has lost 2.5%. However, this underperformance has not been a straight line down. Small caps benefited from a…
A Growing Monetary Policy Divergence Between Australia & Canada
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Chinese trade data for October delivered a mixed message on Tuesday. On the one hand, the export contraction deepened to -6.4% y/y following -6.2% y/y in September and surprised expectations that it would moderate to -3.5% y/y. Yet on the other hand, import…
The Reserve Bank of Australia lifted the cash rate by 25 bps to a 12-year high of 4.35% on Tuesday, in line with consensus expectations. Governor Michele Bullock's post meeting statement underscored that although inflation is moderating, it remains too high…
The US Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) reveals that US banks continued to tighten lending standards for commercial and industrial (C&I), commercial real estate (CRE), residential real estate (RRE) except government residential…
Last week the Bank of Japan (BoJ) announced further relaxations to its yield curve control (YCC) program. Despite this, the yen has shown no signs of life. Since the BOJ's decision was announced, the yen is the worst performing G10 currency; on a 2023YTD…
According to BCA Research’s European Investment Strategy service, German yields will fall toward 2% as market-based inflation expectations dip. For now, the deceleration in Eurozone core CPI can be attributed to the effect of the pass-through of energy…
The US Nonfarm Payroll report indicates that labor market conditions cooled in October. The 150 thousand increase in payroll employment fell below expectations of 180 thousand and marks a slowdown from the 297 thousand increase in September. Moreover, the…
The US ISM PMI delivered a disappointing signal about service sector activity in October. The headline index fell from 53.6 to 51.8 – marking a sharp slowdown in activity and falling below expectations of a much more muted decline to 53.0. The index is now at…
We are approaching another phase transition from boom to bust. Stocks should rally into year-end, but investors should look to reduce equity exposure early next year while increasing bond exposure.