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Recession-Hard/Soft Landing

German Factory Orders Disappoint
German factory orders sent a disappointing signal on Wednesday.  New orders at German factories unexpectedly declined by 3.7% m/m in October, disappointing expectations of a 0.2% m/m rise following two consecutive months of increase. The annual rate of…
Daily Insights
The BoC Stands Pat
The BoC kept its policy rate steady at 5% for the fourth consecutive meeting on Wednesday, in line with expectations. In its press release, the BoC maintained that it is ready to keep hiking if deemed necessary. That said, the BoC noted that inflationary…
Daily Insights
Euro Area Retail Sales: A Budding Rebound?
Retail sales volumes grew on a sequential basis for the first time in three months in October, rising by 0.1% m/m following an upwardly revised 0.1% m/m decline. On an annual basis, the pace of decline slowed from -2.9% y/y to -1.2% y/y. While the release…
Daily Insights
Dr. Copper Is Sending A Warning To Cyclicals
Copper benefited from the recent improvement in global risk sentiment, participating in the broad-based rally in November.  To the extent that the red metal has vast applications across many economic sectors, it is considered a reliable gauge of global…
Daily Insights
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Record Illegal Immigration Masks A Fragile US Consumer

Illegal immigration into the US has skyrocketed to record levels. Correctly accounting for this, US real consumption growth on a per head basis is already fragile. Meanwhile, the real bond yield is only now approaching the pain point that typically triggers a recession. Ahead of the upcoming US jobs report, we point out what it would take for the Joshi rule real-time US recession indicator to breach its event horizon. And how to position in stocks and bonds, both tactically and cyclically. Plus: potential turning points in Biotech and Genome, ADBE, and Taiwan versus China.

Counterpoint by Dhaval Joshi
RBA Stands Pat
The Reserve Bank of Australia (RBA) kept the cash rate unchanged at 4.35% on Tuesday, in line with expectations. In her post-meeting statement, Governor Michele Bullock revealed that economic developments since the RBA’s November rate increase have been in…
Daily Insights
October JOLTS Supports The Soft Landing Thesis
The number of US job openings fell sharply in October according to the JOLTS survey, from 9.4 million to 8.7 million. At 8.7 million, job openings are still above the 7.1 million average seen in the two years prior to the pandemic. Viewed in isolation, this…
Daily Insights
US Credit Markets Are Complacent
According to BCA Research’s US Bond Strategy service, US corporate bond spreads are far too tight. The soft landing narrative took hold of markets in November as the overnight index swap (OIS) curve moved to price in 159 bps of Fed easing between now and…
Daily Insights
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Key Views: Geopolitics In 2024

Global instability will continue in 2024 – whatever happens afterward. Slowing economies will exacerbate already high geopolitical risk and policy uncertainty stemming from the US election and foreign challenges to US leadership. Overweight government bonds, defensive sectors, the Americas versus other regions, aerospace/defense stocks, and cyber-security stocks.

Geopolitical Strategy by Yushu Ma, Max Malakhveitchouk, Matt Gertken, Junfei Guo, Jesse Anak Kuri
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2024 Key Views: The End Of Eras

We expect the US economy to slow and potentially downshift into a recession sometime in 2024, as tighter monetary policy weighs on consumers and businesses. In addition, (geo)political tensions may increase market volatility. The risk/return for US equities is unfavorable. We recommend that our clients reduce portfolio beta and increase allocations to defensives and quality growth.

US Equity Strategy by Irene Tunkel

Related Topics

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