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Recession-Hard/Soft Landing

Economic Uncertainty Is Top Concern Among Canadian Businesses
Canada’s Business Outlook Survey (BOS) indicator increased slightly in Q4, suggesting that sentiment stabilized at the end of 2023. In particular, easing inflationary pressures amid weaker demand and greater competition drove the 0.3-point uptick. Notably,…
Daily Insights
European Stocks Are Vulnerable
According to BCA Research’s European Investment Strategy service, investors should not chase European equities higher from current levels. The soft-landing narrative has captured the minds of investors. The expectations of more disinflation and meaningful…
Daily Insights
Chinese Private Sector Credit Demand Remains Weak
Chinese credit dynamics remain muted with the expansion in total social financing easing from 2.45 trillion yuan to 1.94 trillion yuan in December, below expectations of a tamer slowdown to 2.16 trillion yuan. Loan growth also disappointed, with the 1.17…
Daily Insights
Time To Bet On Curve Steepeners?
The Treasury curve bull steepened meaningfully on Friday with the 2-year yield falling by nearly 11 basis points versus the 3 basis point decline in the 10-year yield. A softer than anticipated US PPI release prompted this move. The unexpected 0.1% m/m…
Daily Insights
US Headline CPI Inflation Exceeds Expectations
US CPI inflation for December came in slightly hotter than anticipated. Headline inflation accelerated from 0.1% to 0.3% on a month-over-month basis and rose from 3.1% to 3.4% on a year-over-year basis. Both the monthly and yearly changes in headline…
Daily Insights
Killing Wage Inflation Is Unlikely To Be Immaculate
The best leading indicator for post-pandemic US wage inflation is the ratio of job vacancies to ‘bad’ unemployment (V/U), where bad unemployment refers to ‘job losers not on temporary layoff’. This ratio has already declined from 6.4 to 4.1 and wage…
Daily Insights
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A Soft Landing Redux

The combined US credit impulse and fiscal thrust indicator will likely relapse in 2024, heralding growth weakness. Stalling US sales volume and falling inflation, combined with sticky labor costs, will herald a non-trivial profit margin compression. The recent increase in Asian exports will likely prove to be a mid-cycle improvement rather than a cyclical recovery.

Emerging Markets Strategy by Arthur Budaghyan
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The 4 Key Indicators Of The US Jobs Market Challenge The Immaculate Disinflationists

The Fed faces a dilemma. Cut rates early to avoid a recession, but at the risk of not slaying wage inflation. Or, not cut rates early to ensure that wage inflation is slayed, but at the risk of a downturn. Faced with such a dilemma, the lesser evil is to slay wage inflation even at the risk of a downturn. Meaning that the market has overpriced early rate cuts. We discuss some other investment implications, and identify two rebound candidates.

Counterpoint by Dhaval Joshi
Keep Portfolio Duration Close To Benchmark For Now
BCA Research’s US Bond Strategy service recommends investors keep portfolio duration close to benchmark for now. They will increase rate exposure as the labor market downturn worsens. Treasury yields are up slightly to start the year, but last Friday’s…
Daily Insights
US Small Business Owners Remain Pessimistic
The NFIB Small Business Optimism Index delivered a slight positive surprise on Tuesday. The index rose 1.3 points to a five-month high of 91.9 in December and beat consensus expectations of 91.0. However, the contents of the report were more mixed. On the…
Daily Insights

Related Topics

Business Cycles Capex Consumer Corporate Economic Growth Government Inflation/Deflation Labor Market Manufacturing Productivity