Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:
Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:
As I mentioned yesterday, our PWA Index presently scores a recessionary -33.33; with 20% of its inputs scoring positive, 53% negative and 27% neutral.
One of its current negative influencers is the Sectors-to-SP500 ratio -- each week we take a 30-day lookback at how each major sector is fairing against the broader market.
Here's last week's look (a below-100 score denotes the sector underperforming the S&P 500):
Watching from a distance the past few days (on vacation), I found myself thinking how desperate "the market" (equity market actors) seems these days... And while indeed early-stage 2023 has seen its share of downs (recently wiping out all of January's impressive gains), it's, frankly, the ups that, for me anyway, have that air of desperation (fear of missing out) to them.
Clients, you may have noticed that we paired back our metals mining exposure recently... FYI, this is purely a tactical call that jibes with our near-term economic thesis... To be sure, we remain very bullish on the metals and miners space beyond what the present bear market has left in it... I.e., we expect to be back with a full position in the not-too-distant future.
Ironically, per BCA's latest research, the factors that have us near-term cautious stand to ultimately exacerbate the bullish longer-term setup:
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CPI (headline) came in inline with economists' expectations, at .4% month-on-month, 6.0% year-on-year... Core inflation (ex-food and energy) came in a titch above expectations, at .5% (vs .4% expected) m-o-m, 5.5% y-o-y.
Again (as I stated over the weekend), at this point, in contrast to what now a whole host of major WS firms are thinking pleading, we see very low odds of a bank stress-induced immediate pause in the Fed's rate-hiking campaign.
Now, make no mistake, we do believe that odds not only favor a Fed pause over the next few months, but that, given our recession thesis, they may actually find themselves cutting their benchmark rate later in the year... Just, given the, albeit lagging, latest data, not right here.
