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Expected Inflation Surges, Just As Expected

Expected inflation has surged to its highest level in a year. This has surprised many people, but expected inflation is behaving just as expected. Expected inflation is not a prophecy, it is just a mathematical function of delivered inflation. We discuss what this means for central banks in the US, UK, euro area, and Japan. Plus: bitcoin’s structural uptrend to $100,000+ is still intact.

Counterpoint by Dhaval Joshi
A Closer Look At February's US Services PMI
The US ISM Services PMI declined slightly to 52.6 in February, just below expectations of 53. Overall, the service sector continues to expand, however, the recent ISM suggests that growth is slowing down. In fact, most of the components of the ISM…
Daily Insights
The Case For Norway
Data out of Norway is becoming increasingly positive, and there is a strong investment case to be made for the country, with bullish implications for both equities and the currency: Retail sales remain robust and are catching up to the improvement we…
Daily Insights
The Fed Doesn't Need To Raise Rates To Cause A Large Hawkish Shock
We noted in a previous Insight that recent comments from Raphael Bostic, President of the Federal Reserve Bank of Atlanta, may reflect a growing realization among policymakers that they have inadvertently caused a significant easing in financial…
Daily Insights
Dax 40 Reaches New Highs: How Much Further Upside?
The stock market of the Eurozone’s largest economy keeps grinding higher with the DAX 40 closing at new highs last week. Since its October low, the index of German blue-chip companies advanced by 20%. Does this rally have legs? On a relative basis,…
Daily Insights
Risks To The Recessionary Base Case
Our US Investment Strategy service examines the state of consumer finances in the context of their view that a recession will materialize this year with a double-digit peak-to-trough decline in S&P 500 earnings expectations. They expect the…
Daily Insights
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Sector Chart Pack: The Rally That Keeps On Rallying

The market narrative continues to be dominated by the Magnificent Six, which drove both market performance and strong Q4 earnings results. While all sectors and styles have recently turned green, the rally is still mostly narrow. Earnings growth appears to be strong, but outside of the Magnificent Six, many companies are struggling. The market appears expensive and overbought, but that is mostly down to the high valuations and the popularity of the Magnificent Six.

US Equity Strategy by Irene Tunkel
Switzerland: Deflation Is Now The Risk
Swiss annual inflation continued to decelerate in February, with headline CPI now at 1.2% and core at 1.1%. This is remarkable since inflation continues to track well below the 1.8% forecast by the Swiss National Bank (SNB) for the first quarter. Import and…
Daily Insights
Easier Financial Conditions Have Made Their Way To "Main Street"
Economic sentiment has improved since the December FOMC meeting, with positive momentum extending into February. The chart above neatly summarizes the impact that the Fed’s projected easing has had on sentiment, both on “Wall Street” and “Main Street”. The…
Daily Insights
The Profound Underperformance Of European Equities
According to BCA Research’s European Investment Strategy service, the underperformance of European assets relative to the US is due its lagging productivity, even after adjusting for sectoral compositions in their stock markets. Structurally, European…
Daily Insights

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