APPROACHING STALL SPEED Banking system concerns of a month ago have largely faded following liquidity support from the Federal Reserve and the passage of time without further failures – though not without consequence. The extension of credit from smaller regional banks is likely to decline...
OK, ON AVERAGE On average, the global economy looks to be “OK” – regional and sectoral areas of weakness being offset by other areas of relative strength; meanwhile, inflation seems contained in some areas albeit still raging in others. On average, the financial system is “OK”...
Signs of Stress The surprise failure of Silicon Valley Bank (SVB) has brought fears of instability of the financial system, sending a shockwave of uncertainty across the capital markets. Very elevated volatility in Treasuries, including a dramatic drop in rates across the curve, highlight investor concerns...
Looking Across The Valley Global equities are off to a strong start in 2023. Investors have chosen to look across the valley of softening fundamentals – focusing instead on declining inflation, the near completion of central bank rate increases and moderating long-term rates. Notably, the...
WATCHING WAGES As inflation continues to moderate, attention has shifted to a narrower aspect of the price story – non-shelter services inflation. This component represents the aspect of inflation most closely tied to wage growth, and is proving the most resistant to...
A MESSI YEAR Congratulations to Argentina for winning their third World Cup, putting them behind only Brazil (5), Germany (4) and Italy (4)* for most World Cup titles. Team captain – and global superstar – Lionel Messi’s only World Cup title certainly came during a messy...
A PIVOTAL YEAR 2023 will likely be a turbulent year as inflation and monetary policy fears pivot to a weak global economy, but also to lower inflation and central bank pauses. We see some fundamental downside risk but sentiment upside. Read the full article: VIEWPOINTS JANUARY 2023....
A NARROWED PATH Extraordinary volatility continues in financial markets as investors grapple with the outlook for inflation, monetary policy and the eventual economic impact. We experienced some welcome upside volatility in both stocks and bonds recently as consumer price inflation (CPI) finally delivered a positive surprise. Read...
BUMPY PATH TO THE PEAK We have written for months about elevated volatility being a recurring issue as long as the market was uncertain about how high interest rates were going. Higher than expected inflation reports in recent months have led to increased expectations around monetary...
PREPARING FOR WINTER “Winter is Coming” was the name of the very first episode of HBO’s very popular Game of Thrones television show; and it quickly set the plot for the series: After the longest summer in history (10-plus years), preparations are being made for an...