Recession-Hard/Soft Landing
ISM Services PMI Expands Modestly For Second Consecutive Month…
Beige Book Shows Signs Of Slower Employment…
Labor Demand Softens In July (And In June…
BoC Cuts Rates For Third Consecutive Month…
Sluggish But Not Collapsing Chinese Economic Conditions…
Already Optimistic Earnings Expectations Continue To Improve…
Fade Any 2Y/10Y Un-Inversion…
US GDI Lags GDP In This Cycle…
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.
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.