Capital Market Outlook
Reframing the Traditional Investment Strategy
Elevated inflation and tighter monetary policy may present potential challenges for the classic 60/40 allocation. Plus how America's foreign creditors react to the debt ceiling debate could influence near-term U.S. asset prices, and one of the biggest unknowns is the expectation for bank lending.
May 22, 2023
Inflation Still On A Downtrend Despite Strong April Readings
A looming projected June 1 debt ceiling X-date leaves open the possibility of a government default. Plus the deteriorating economic backdrop augurs for a larger contraction in Q2 earnings, and inflation is still on a downtrend despite strong April readings.
May 15, 2023
A War-like Policy Response from a Unified Federal Reserve and Treasury: Parallels between WWII and Coronavirus Eras
In both the WWII and coronavirus eras, an interventionist Federal Reserve has facilitated high nominal GDP growth and eventually very high inflation. Plus investors should position for the coming multiyear boom in U.S. infrastructure, and the swift rise and fall of SPACs is proof that fads fade.
May 8, 2023
How Long Do Economic Expansions Last During High Inflation Periods?
Data on periods of high inflation are consistent with our view that this expansion could be running out of steam. Plus globalization metrics suggest Corporate America is becoming more embedded globally, not less, and concerns with agency mortgage-backed securities due to recent bank failures.
May 1, 2023
The Calm Before the Storm?
Even absent a recession, economic growth is generally seen remaining well below potential for at least two years, with risks to the downside. Plus we continue to watch the international market landscape for opportunities, and debt ceiling negotiations hit Wall Street.
April 24, 2023
Housing Stocks: Bear Market Rally Or A New Bull Market?
We suspect another leg lower is likely for the housing sector in a recession. Plus headwinds are intensifying for small businesses, and the world is glacially moving towards a multi-reserve currency world with the dollar first among lesser equals.
April 17, 2023
Time for Higher-Quality Positioning
Consensus earnings estimates will move lower, in our view, motivated by bouts of financial stress. We emphasized our preference for high-quality positioning across the board, and see more constructive opportunities for Equites over the long term.
April 10, 2023
Deep Credit Restraint Likely In The Pipeline
Bank lending is likely to remain depressed, substantially restraining credit creation and economic growth, in our view. Plus elements fueling economic resilience have encountered strengthening headwinds, and sharp sector rotations were seen throughout the first quarter.
April 3, 2023
The Outlook for Venture Capital Following Silicon Valley Bank
Venture Capital investments “in the ground" may have to work through further valuation pressures, but “fresh capital" may be looking at an attractive opportunity set. Plus the labor market could soon be on weaker ground, and is there a global tradeoff between financial stability and price stability?
March 27, 2023
A-fib not a Heart Attack
Near term, we expect more market chop and churn but want to remind investors that every crisis is also an investment opportunity. Plus the time to end quantitative tightening is fast approaching, and we have not yet seen the final spike in the Volatility Index, in our view.
March 20, 2023
U.S. Economy At Stall Speed. Productivity Slowdown Entrenched
The U.S. economy is at stall speed and the productivity slowdown entrenched. Plus the global purchasing power of females could expand if the right policies are put in place to create more gender parity, and consumer credit reaches platinum status.
March 13, 2023
Powell vs. the $26 Trillion Hydra-headed Beast
One year into the Federal Reserve tightening cycle, it confronts a U.S. economy refusing to roll over easily. Plus high labor costs continue to eat into profits, forcing companies to curb hiring, and the $3 trillion no one is talking about.
March 6, 2023
Earnings Recession Continues
Financial conditions have begun to tighten again, raising the odds of a 2023 recession. Plus some consequences of the war in Ukraine for financial markets one year on, and sustainable investing trends to watch in 2023.
February 27, 2023
Is China’s Technology Sector Investable Again?:
Is China's technology sector investable again? Plus U.S. and eurozone growth is expected to be significantly weaker this year than last, and how market concentration impacts performance.
February 21, 2023
How Golden Is the Cross?
The macro backdrop prevents us from getting more excited about the golden cross. Plus heightened geopolitical risks serve as a wild card to asset prices, and the last few weeks have led investors to wonder whether a new bull market may be charging forward.
February 13, 2023