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December US retail sales missed estimates, with the headline number printing at 0.4% m/m, a decline from an upwardly revised 0.8% in November. On the positive side, the control group beat estimates at 0.7%. Netting it all out, the report was uninspiring,…
The December US CPI came in better than expected. While headline CPI met estimates of 0.4% m/m (2.9% y/y), core surprised to the downside at 0.2% m/m, decelerating to 3.2% y/y from 3.3%. Moderation in core annual inflation was driven by both goods, which are…
The December NFIB Small Business Optimism Index beat expectations, jumping to 105.1 from 101.7 in November. Most index subcomponents increased, led by measure of expectations, notably for the state of the economy and real sales. After jumping 39 percentage…
The December US Producer Price Index came in cooler than expected, increasing 0.2% m/m, a deceleration from 0.4% in November. Core PPI, excluding food and energy, was flat after increasing 0.2% a month prior. Inflation is a lagging variable, as…
The preliminary January University of Michigan Consumer Sentiment Index missed estimates on Friday, driven by a cooling of consumer expectations. Worryingly, both the 1-year and 5-to-10 year inflation expectations ticked up to 3.3% from 2.8% and 3.0%,…
The December ISM Services PMI beat estimates, increasing to 54.1 from 52.1 in November. All subcomponents increased except for employment, which nonetheless remains in expansion. The prices paid component was especially strong, increasing to 64.4 from…
Paradoxically, raging optimism on the US economy is making a reacceleration in growth less likely in 2025. The reaction of the bond market has made the Fed rethink its cutting campaign. Markets are also constraining Trump’s agenda. US manufacturing will not recover with a surging dollar. Fears of inflation and debt sustainability have made moderate House Republicans push back against the President Elect’s wishes. Given the sky-high optimism embedded in asset prices, we believe a defensive portfolio stance is warranted on a 12-month horizon. Overweight gold to hedge the risk of a fiscal crisis.
The November UK CPI, in line with estimates, hit an eight-month high, accelerating from 2.3% y/y to 2.6%. Core and services inflation were also strong at 3.5% (vs. 3.3% in October) and 5.0% (flat from October), respectively. Services inflation…
US November housing data was mixed, but still reflected a weak picture. Housing starts were down 1.8% m/m, below expectations of a 2.6% increase. However, building permits were stronger than expected, increasing 6.1%. Units under construction remain in free…