Weekly Summary

“Cold Heart”

“Cold Heart”

Weekly Summary: August 1 - August 5, 2022 Key Observations: A critical component of our “soft” pivot narrative for the Federal Reserve (Fed) expounded in last week’s narrative is our assumption that the U.S. economy continues to slow. The economic data we reviewed...

“The Scientist”

“The Scientist”

Weekly Summary: July 25 - July 29, 2022   Key Observations: We characterize the Federal Reserve’s (Fed) latest policy stance as relatively dovish, and we label this stance as a “soft” pivot. Given our assumption of peak headline inflation and our observations of a...

“Handle with Care”

“Handle with Care”

Weekly Summary: July 18 - July 22, 2022   Key Observations: All of the U.S. housing surveys disclosed this week continued to show a weakening housing market that was impacted by elevated inflation and higher mortgage rates that affected the “affordability” of buying a...

“Every Breath You Take”

“Every Breath You Take”

Weekly Summary: July 11 - July 15, 2022   Key Observations: Financial markets continue to price in a greater likelihood of recession risks, particularly in Europe. Higher-than-expected U.S. June CPI and PPI readings will put increasing pressure on the Federal Reserve...

“Sympathy for the Devil”

“Sympathy for the Devil”

Weekly Summary: July 4 - July 8, 2022   Key Observations: In general, the financial markets continued to reflect increasing risks of a recession over the next year. Weakening commodity prices and lower interest rates before their turnaround were reflective of...

“Everybody Knows”

“Everybody Knows”

Weekly Summary: June 13 - June 22, 2022   Key Observations: Last week’s declines in the S&P 500 of 5.79% and its energy sector decline of 17.16% were the worst weekly declines since March 2020. We view these declines as financial markets increasingly pricing in...

“Like a Hurricane”

“Like a Hurricane”

Weekly Summary: June 6 - June 10, 2022     Key Observations: The recent aggressive tightening of their monetary policies by many major central banks (CBs), along with their updated forecasts of higher rates of inflation and lower economic growth rates, leads us to...

“Telling Stories”

“Telling Stories”

Given our assumptions, we continue to anticipate that global economic growth forecasts will be lowered and that inflation forecasts will be raised. We believe that financial market volatility will continue for at least as long as this war lasts.

“Repent”

“Repent”

We continue to interpret recent trading in U.S. equities as pricing in an elevated chance of a recession within the next twelve months. This does not mean that such an outcome is inevitable. We surmise that this view has taken hold of the markets along with the assumption that the Russia-Ukraine war will persist for quite some time.