Our Global Investment Strategy (GIS) team believes the US economy is not as strong as commonly believed, and that equity valuations offer little buffer given the risk of incoming macro shocks. The US economy is more fragile than…

 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.…

 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…

 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%…

 The US December jobs report came in stronger than expected. Payrolls rose by 256k vs. a downwardly revised 212k in November, leaving the 3-month moving average at about 170k. The unemployment and underemployment rates decreased to 4.…

 Our Counterpoint Strategy team sees Japanese real yields as the key risk to global equities. Rising inflation expectations in developed markets, excluding Japan, will keep inflation above target and limit further rate cuts.…

 The post-COVID inflation impacted the most important cross-asset relationship: the stock-bond correlation. Higher inflation expectations pushed yields higher, leading to a correction in bond and stock prices. As price pressures…

 Chinese December CPI and PPI releases show deflationary pressures are not abating. CPI slowed to a 0.1% y/y pace from 0.2% in November, while producer prices fell 2.3%. The Chinese economy has not meaningfully changed course…