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Economy

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
China PMIs: Stabilizing
China’s NBS PMI release indicates that the Chinese growth is stabilizing at a low level. The composite PMI came in at 50.9 – unchanged from January. The stabilization was led by the non-manufacturing sector though both the manufacturing and non-manufacturing…
Daily Insights
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
Global Manufacturing PMI Returns To Growth
The JPM Global Manufacturing PMI improved from 50.0 to 50.3 in February, indicating that global manufacturing activity is growing again after having contracted for 18 months. Notably, new orders expanded from previously contracting levels (from 49.8 to…
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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Risks To Our View

We feel as good about spurning the soft-landing narrative today as we did about spurning the recession narrative a year ago, but we are not giving into complacency. This week’s report looks at two key ways that we may be getting it wrong: by underestimating households’ asset support and the labor market’s durability. We remain tactically neutral but continue to look for opportunities to turn defensive.

US Investment Strategy by Doug Peta

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