Labor Market
In this Special Report, we analyze the behavior of economic data leading up to US recessions and discuss some common patterns.
Our annual end-of-summer chartbook report traces the labor market deterioration that led us to downgrade equities at the beginning of August. It also highlights the soft-landing expectations that the credit and equity markets are discounting. We like the risk-reward profile of our newly defensive stance.
Even after the Fed cuts rates, policy will remain restrictive for some time. Moreover, in history, stocks have tended to fall around the first rate cut. We remain cautious on the outlook for the economy and risk assets.
MacroQuant continues to recommend underweighting equities and overweighting bonds. This is consistent with the Global Investment Strategy Team's decision to downgrade global equities to underweight in late June.
