Labor Market

The US economy is in the “Overheating” phase, so stronger growth brings higher inflation. Tight monetary policy means recession is still likely over the next 12 months. Stay defensive.

European stocks have massively underperformed US ones since the GFC. Demographics and productivity say this trend will continue, but is that really so?

MacroQuant sees significant downside risks to stocks over a 1-to-3 month horizon and suggests increasing allocation to long-term bonds. The model favours defensive equity sectors but is also hedging its bets by overweighting materials.

The signs of an approaching recession are starting to emerge. We will turn tactically defensive once they all fall into place.

Looking at economic activity, global monetary policy seems restrictive, however, the behavior of financial markets tells a different story. What gives?