Our 2H23 market outlook has brightened modestly following the most recent inflation report, which lowered our recession assessment. However, inflation will need to continue to ease into the autumn months in order to provide an all clear on the inflationary coast. While recession risk has ebbed, the economy continues to straddle a knife’s edge. If […]
retail sentiment
Debt Ceiling & Liquidity
The current debt ceiling morass should add liquidity into the economy and markets in the short term. The added liquidity, along with Fed pivot enthusiasm, is clearly supporting higher asset prices currently. This is ironic as not resolving the debt ceiling in a timely manner increases market risk, and it highlights the unsustainable debt picture […]
US Recession and Earnings Outlook
This Dispatch updates our US recession and earnings outlook. Forward-looking macro indicators like the LEI point to further slowing. June Quarter ex-energy earnings declined YoY, and Wall Street is finally starting to cut estimates. Yet, the dominant narrative we hear is that that earnings are growing, and valuations are now attractive. As we’ve previously written […]
Weaponizing Financial Assets
Weaponizing financial assets by sanctioning the Central Bank is an extraordinarily powerful tool against Russian aggression. However, we should be mindful of potential longer-term second-order effects. Nation states are likely to rethink their reserve strategies so that they have control of reserve assets. Digital assets provide direct ownership (your asset is no one else’s liability) […]