Mar 12, 2018 | Leading Indicators, Uncategorized, US Economy
A key risk for investors remains an US inflation overshoot. US inflation breakevens have been rising since the start the year (top-left chart), however we believe this is more a reflection of market pricing returning to fair value than the start of a self-perpetuating...
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...
Mar 24, 2017 | US Equities
(from our Weekly of 21st February) As we have been noting, the market remains in a risk-on regime, with positive momentum, falling volatility and confirmation from various inter-market relationships such as cyclical stocks outperforming high dividend stocks, high...
Apr 15, 2016 | US Economy
Profit margins are declining, and we expect them to fall much further. As you can see from the chart below, Variant Perception’s leading indicator for wages does a very good job of leading US corporate profit margins by a little over a year and a half. The message is...
Nov 18, 2015 | Uncategorized
The corporate profit cycle is now turning down, and our leading economic indicators point to further declines in return on equity (ROE) and profit margins. This is not a short-term call on equity markets but a major structural factor investors should bear in mind in...
Jun 2, 2015 | Leading Indicators, US Economy
There has been a sharp divergence between ISM services and non-services in the US. Many of our leading indicators for manufacturing have pointed to weakness. This suggests demand is tilting away from manufacturing and towards the service sector. The breakdown of the...
