Our US Equity strategists dove into macro’s explanatory power in driving sector returns and fundamentals. Using principal component analysis, they show that growth, inflation, and rate risk together account for nearly three-quarters of sector return variation. Macro risks also influence fundamentals...
Cross-asset correlations remain the clearest signal of how investors are pricing the energy shock. Risk assets rebounded late Monday after President Trump described the Iran war as “very complete, pretty much.” However, the outcome depends on Iran’s response, leadership cohesion, and willingness to ...
In this monthly iteration of our chartpack, we focus exclusively on just two questions. First, we present four scenarios for how the situation in the Middle East develops. Second, what happens if the pernicious scenarios come to dominate, how investors should play a global recession, were it to occu...
If the 2022 roadmap is any guide, equity markets and cyclical currencies will trough only after confirming that the peak in energy prices is in the rearview mirror. In the very near term, investors should focus on P&L preservation. Reduce exposure to equities, and seek refuge in gold, and inflation-...
Growth, inflation, and rate risk drive sector returns and fundamentals, but macro’s explanatory power is at multi-decade lows. Long/short industry-group baskets show the equity market has turned pessimistic about growth, a potential opportunity as the macro data firm. The market’s inflation view has...
Stablecoins are evolving from a niche crypto instrument into a macro-relevant financial layer. This Special Report maps the transmission channels and consequences for the Treasury market, bank funding dynamics, and the dollar’s global footprint....
Investors have decided that the news flow out of the Middle East over the weekend was beyond negative, it is borderline apocalyptic. There are several reasons to agree with this assessment....
The basic idea behind the kinked Phillips curve framework is that there is a non-linear relationship between inflation and unemployment. When long-term inflation expectations are well anchored and the economy is operating along the steep portion of the aggregate labor supply curve, falling labor dem...
