The UK labor market remains far too tight to expect wage growth to slow to levels consistent with the Bank of England inflation target. A true recession with rising unemployment is needed to finally slay the UK inflation beast. 2024 rate cuts are off the table, with the central bank having to keep m...
We go overweight Late-Stage Venture Capital and APAC Private Equity but remain underweight North America Buyouts. We maintain our neutral outlook towards Hedge Funds and are positive on Long-Short Equity, Event Driven, and CRO strategies. We are cooling towards Direct Lending strategies as competiti...
A deep dive into the balance sheets of top listed firms around the world suggests that corporate health differs substantially across key equity markets. To profit from these differences when the next recession arrives, we recommend that equity investors favor the US and Japan, be neutral on Europe w...
In a guest authorship of Section I, Doug Peta addresses the recession skepticism often raised by investors. Excess savings are nearly or already drained, labor market indicators remain consistent with an eventual contraction in payroll growth, and there are no signs that credit growth will keep cons...
Investors should not underrate the chance of an oil shock ahead of the US election as Israel needs to push back against Iranian proxies, and Iran needs to demonstrate its regional reach to put a wedge between Israel and the US. We remain strategically long energy commodities and equities, and defens...
The disinflation process is over in Poland and Hungary. Only the Czech Republic will see its core inflation meet its central bank target this year. The reason is much tighter labor market dynamics in the first two. Investors should continue to short a basket of CE3 currencies vis-à-vis the US dollar...
China’s economy is cruising at a very low altitude. The odds are that China’s equity rebound is running out of time. The RMB will continue to depreciate versus the US dollar in the coming months, albeit the pace may be modest....
Q1 earnings results of the largest US banks have demonstrated that the engine of recent growth in profitability, NII, has faltered as funding costs are rising fast. However, the resurgence in non-NII thanks to a revival in corporate activity has been a saving grace. Earnings growth appears to have b...
