Recession-Hard/Soft Landing
Our last publication of 2023 is an illustrated guide to our view that the economy will enter a recession around midyear. We expect equities will underperform Treasuries and cash over much of 2024, but we are waiting to turn tactically defensive until more investors are drawn into the soft-landing camp, capping the equity rally.
Explore the eight main themes that will drive the returns of European assets in 2024.
In this week’s report, we present our dollar view for 2024 and beyond, with a few trade ideas.
The November US retail sales release for November delivered a positive signal about consumer spending. Overall retail sales unexpectedly increased by 0.3% m/m, surprising expectations of a 0.1% m/m decline. The details of the report were also favorable. Eight…
As expected, the ECB kept its policy rate unchanged on Thursday. In the updated macroeconomic projections, the central bank revised down its inflation and growth forecasts for next year. It now expects inflation to ease to 2.7% in 2024 – 0.5 percentage…
The November US CPI release came in broadly in line with consensus expectations on Tuesday. On an annual basis, headline CPI inflation eased from 3.2% y/y to 3.1% y/y while core inflation was unchanged at 4.0% y/y. On a monthly basis, both headline and core…
The continued improvement in German investor morale captured by the ZEW survey corroborates other indicators pointing to near-term support for Eurozone stocks. Economic sentiment jumped three points to a 9-month high of 12.8 in December, surprising…
US small-cap stocks have benefitted from the recent improvement in risk sentiment. The S&P 600 is up 10% over the past month – exceeding the S&P 500’s gains by 5.4 percentage points after having underperformed throughout most of the past year. …
According to BCA Research’s US Bond Strategy service, Treasury curve steepeners will pay off handsomely once the next recession hits. However, curve flatteners (aka barbelled Treasury portfolios) offer better value for the near term. A barbelled Treasury…
Results of the New York Fed’s November Survey of Consumer Expectations corroborate the signal from the University of Michigan’s preliminary results that inflation expectations are receding. The 0.2 percentage point drop in one-year ahead inflation…