The Santa Claus rally has been fueled by investors optimism about a soft landing which is the least likely macro outcome in 2024. A pullback in the market is imminent as the probability of "too hot" or "too cold" will get priced in. We are downgrading Software and Services on a tactical basis to tak...
Despite the blah opening to the year, we do not think stocks have reached an inflection point. We expect that incoming data will continue to flatter the soft-landing narrative for another couple of months, helping the S&P 500 to establish a new all-time high before the rally runs out of steam....
Following today’s US jobs data release, the Joshi rule real-time US recession indicator inched up to 0.18 and is now just a whisker from its recession event-horizon of 0.20....
The sector model continues to favor IT and Consumer Discretionary stocks and downgraded Industrials. We also take a deeper look into the exceptional performance of our Value L/S factor and find weakness in small-to-mid cap growth stocks....
A soft landing can be achieved but not maintained. We are cutting our tactical recommendation on stocks from overweight to neutral and scaling back our long-duration stance....
The attacks on Red Sea commercial tankers by Iran’s Yemeni proxies, the Houthi movement, are an inflation risk inasmuch as they lengthen voyage times for any shipping forced to avoid the Bab el-Mandeb Strait. The risk of an expansion of these attacks is, in our view, limited, given Iran’s inability ...
The market is excited by the idea that the Fed will cut rates early this year, even without a recession. But is that likely, with inflation still set to be around 2.8% mid-year?...
A post-mortem of our trades for the year, and also comments on future yen and sterling moves from the recent BoJ meeting, and the UK inflation report....
