Inflation/Deflation
The November NFIB Small Business Optimism index beat expectations, jumping to 101.7 from 93.7 in October. Outside of inventory satisfaction, which was flat, all index subcomponents increased, led by measures of expectations. The outlook for general business…
Chinese deflationary pressures intensified in November, with CPI ticking down to 0.2% y/y from 0.3% in October. Producer prices deflation eased, with prices falling 2.5% y/y, less than -2.9% y/y a month prior. The weak data prompted a Politburo statement…
The US November jobs report was mixed. Payrolls rose by 227k vs. an upwardly revised 36k in October, leaving the 3-month moving average at 173k. The unemployment and underemployment rates however rose 0.1% to 4.2% and 7.8%, respectively. The labor force…
Our European Investment Strategy and GeoMacro Strategy teams published a joint report, digging into the structural challenges behind Europe’s economic underperformance, while pointing out to potential turnaround opportunities. Europe’s prolonged…
The November ISM Services PMI missed expectations, declining to 52.1 from 56 in October. All subcomponents declined, with new orders falling from 57.4 to 53.7. Employment also weakened but remains in expansion, while price pressures were roughly unchanged. …
The November Caixin services PMI ticked down to 51.5, which along with a rising manufacturing PMI pushed the composite up to 52.3 from 51.9. Components such as new orders and employment also ticked down, and output prices fell to 49.6. Services also weakened…
The Federal Reserve’s Beige Book shows a modestly growing economy imbued with post-election optimism, while highlighting some caution about employment. The latest Beige Book is in line with other sentiment indicators showing modest growth but increased…
Job openings beat expectations in October, increasing to 7.74m from 7.44m in September. The details of the JOLTS report were mixed, however. Hires ticked down, driven by interest rate-sensitive sectors. Outside of hires, the rest of the report had a more…
The post-COVID recovery has been one of excesses. Government deficits have ballooned, tight labor markets have led to a windfall of consumer spending, and equity valuations have soared on the back of lofty growth expectations. But these excesses will no longer be sustainable in 2025. Our theme for next year is Thin Is Back In. Government budgets, economic growth, and equity valuations will be leaner than investors expect. We discuss this the reasoning behind this macro view and the asset allocation implications that follow from it.
The November flash Eurozone inflation estimate met expectations, with headline HICP accelerating to 2.3% y/y from 2.0% in October, above the ECB’s target. Core inflation remained constant at 2.7%. At 3.9%, services inflation is still elevated. The outlook…