Recession-Hard/Soft Landing
With the 1-year CPI swap rate trading at 2.3%, the market was already priced for a significant drop in inflation heading into yesterday’s May CPI release. The results of the report should only reinforce those expectations. While the monthly growth rates of…
China’s money and credit update for May continues a string of disappointing Chinese data releases. The CNY 1.56 trillion increase in total social financing fell below expectations of a CNY 1.90 trillion rise. Similarly, the CNY 1.36 trillion in new bank loans…
The message from the ZEW economic research institute’s June survey was mixed. On the one hand, the German Indicator of Economic Sentiment unexpectedly ticked up from -10.7 to -8.5. While the negative reading indicates that the pessimists continue to outnumber…
In response to the first-ever federal indictment of a former President, investors should focus on the state of the economy and not on Trump’s legal trouble. They should also use the current market rally to stock up on protection, as a recession is still likely, albeit delayed.
Results of the New York Fed’s Survey of Consumer Expectations sent a positive signal about short-term inflation expectations. Median one-year-ahead inflation expectations dropped by 0.3 percentage point to a two-year low of 4.1% in May. Moreover, median…
According to the Exposure Index compiled by the National Association of Active Investment Managers (NAAIM), active risk managers are increasing their net exposure to equities. The range of responses to the weekly survey include 200% leveraged long, 100% fully…
Chinese producer prices sent a disappointing signal about the domestic economy on Friday. The pace of decline in producer prices accelerated from -3.6% in April to -4.6% in May – worse than expectations of a -4.3% drop. The decrease was particularly…
As we’ve highlighted in recent Insights, the S&P 500’s year-to-date rally has been concentrated among a few mega cap stocks. In particular, companies that benefit from the AI craze have driven the gains. This dynamic is also reflected in the sector…
Investor sentiment has improved meaningfully in recent weeks. According to the latest AAII survey, the share of respondents with a bullish outlook jumped from 29.1% to 44.5%. It crossed above the historical average of 37.5% for the first time since February…
The final Q1 GDP release shows the Euro Area economy contracted by 0.1% q/q last quarter, a downwards revision from estimates of a 0.1% expansion. To the extent that this follows a 0.1% q/q decline in Q4 2022, the revised numbers indicate that the Euro Area…