Increasing gray-zone confrontations and another round of tariff and non-tariff barriers to trade are not being reflected in commodity prices. This is keeping inflationary pressures emanating from the real economy subdued. That said, inflation risks are increasing as threats to commodity supplies and...
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 dow...
The market’s pricing of a soft landing means that geopolitical risks are becoming more, not less, relevant in 2024. US domestic divisions will invite challenges as foreign powers rightly fear that US policy will turn more hawkish after the election....
A low multiplier effect of stimulus will reduce the magnitude of the rebound in China's business activities in 2024. The housing market downturn will likely persist, and the ongoing household deleveraging also poses a significant challenge to China’s economic recovery....
The Santa Claus rally has been fueled by investors optimism about a soft landing which is the least likely macro outcome in 2024. A pullback in the market is imminent as the probability of "too hot" or "too cold" will get priced in. We are downgrading Software and Services on a tactical basis to tak...
Despite the blah opening to the year, we do not think stocks have reached an inflection point. We expect that incoming data will continue to flatter the soft-landing narrative for another couple of months, helping the S&P 500 to establish a new all-time high before the rally runs out of steam....
The USHQ SMID outperformed its benchmark by 1.2% and the USHQ Large Cap portfolio moderately underperformed. We also show in the intro that US stocks are overbought from a technical and sentiment standpoint, suggesting caution in January....
Following today’s US jobs data release, the Joshi rule real-time US recession indicator inched up to 0.18 and is now just a whisker from its recession event-horizon of 0.20....
The sector model continues to favor IT and Consumer Discretionary stocks and downgraded Industrials. We also take a deeper look into the exceptional performance of our Value L/S factor and find weakness in small-to-mid cap growth stocks....
