- Inflation seems to be receding.
- US rates are receding too.
- US Dollar Index is receding too.
- Another 100 bps hike priced by markets.
- Freight prices are decreasing sharply.
- Mega caps have underperformed YTD
- The VIX has not even reached 40 this year.
- Restoring of confidence remains key in China.
- Central Bankers are deflating “the bubble” in an orderly manner.
- Corporate earnings (worldwide) likely to be revised lower in 2023.
- We expect a mild correction next year (-10% for developed markets) with several “Bear Market Rallies”.
- High dispersion amongst economies ( EU, China, India) and sectors ( Cyclicals, etc.)
- Are stocks still a good yield enhancer.
- US Treasury market pressure.
- US Treasury 10-Year/3-Month spread inverted.
- Central banks likely to remain “hawkish" in face of sticky inflation.
- Rates/Yields likely to drift higher until Q2 2023.
- Recession likely to happen in 2023 in the US/ Europe while China slows down quickly.
- Duration to be extended by Q2 2023
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