Aug 18, 2017 | US Economy
Earlier this year we wrote a Thematic piece on autos arguing that we would see auto companies cut prices to move inventory, idle plants and produce fewer cars. We have already seen a slowdown in car sales, and some manufacturers have guided to lower production this...
Jul 21, 2017 | US Economy
Although coincident growth data is holding up for now, there are a number of macro “red flags” at present, in particular flattening yield curves (despite the recent bounce, US 2s10s is still 34bps flatter YTD) and falling excess-liquidity conditions. Yield curves are...
Jun 27, 2017 | US Economy
The US and global yield curves steepened briefly last summer and steepened further after Trump’s election, but it has been rolling over almost all year. This has a negative read through to growth and key risk assets. The yield curve is one of the key things we track...
Jun 10, 2017 | US Economy
We are seeing multiple signs of a slowdown in lending in the US, as discussed in our recent thematic US Banks Stocks: Exposed to the End of the Credit Cycle. The top chart shows a coincident relationship between sales-to-inventory ratios and C&I lending. As...
Apr 28, 2017 | US Economy
Over the past few weeks we have expressed scepticism on the Trump reflation trade and we have argued that bank stocks should underperform. We have shown previously that when you look at the 3 and 6 month change in Commercial & Industrial lending as well as the...
Feb 17, 2017 | US Economy, US Equities
Higher economic growth usually translates into higher bond yields, higher stocks and rising oil prices; but, too much of a good thing is bad for stocks. Over the past few weeks, we’ve shown that our stock/bond RSI signal has triggered. We now have an Inflationary...
Jan 20, 2017 | Uncategorized, US Economy
S&P 500 returns are positively correlated to the Citigroup Economic Surprise Index. The Surprise Index leads the S&P 500 by about two months, as you can see from the chart on the left. Normally, low levels in the index are a good time to buy. When the...
