In today’s briefing:
- CPI Review: Gung Ho summer! Risk-off fall?
- Liquidity watch: Two major waves of liquidity left this year of varying quality
- CX Daily: Are AI-Powered Learning Gadgets Ready to Be at the Head of the Class?
- China: Weakness of Residential Property Market Spills to Banking Sector
- HEW: Doves Ticking Boxes
- Labor Watch: This doesn’t exactly scream recession (yet) …
- US CPI Inflation 2.97% y-o-y (consensus 3.1%) in Jun-24
- Will Presidential Election Cycle Theory Fuel Continued US Equities Rally in 2H 2024?
CPI Review: Gung Ho summer! Risk-off fall?
- The inflation report provides a surprisingly soft set of data, aligning perfectly with the FOMC’s hopes, but not with their predictions.
- Back in June, the FOMC projected only one rate cut while hiking the inflation forecast to levels that now seem feasible to undershoot.
- This report, as soft as it gets, shows transportation services down by 0.5% for the month, and shelter prices have only increased by 0.17% MoM.
Liquidity watch: Two major waves of liquidity left this year of varying quality
- While we are waiting for Godot and US inflation, we have examined the liquidity outlook for the remainder of the year.
- The important part of the analysis is to understand why liquidity is moving, not just if it is moving.
- Depending on the type of liquidity additions/withdrawals, the quality of the liquidity signal improves/worsens as a driver of asset markets.
CX Daily: Are AI-Powered Learning Gadgets Ready to Be at the Head of the Class?
- AI / In Depth: Are AI-powered learning gadgets ready to be at the head of the class?
- Food safety /: Processing firm says it is a ‘victim’ of contaminated cooking oil scandal
- Property /Land: sales slashed by more than a third in first half of 2024 as real estate slump bites
China: Weakness of Residential Property Market Spills to Banking Sector
- China authorities appear to have the financial stability spill over from the property sector , through a combination of direct support for housing and forced mergers of weak banks.
- This game plan will likely be followed for the next few years. However, this all means residential property investment will be an economic headwind to growth for years to come.
- Problems will remain multi year and will hangover weaker developers/LGFV’s/banks and non-banks.
HEW: Doves Ticking Boxes
- Voters are clear about their rejection of Rassemblement National in France, and central bankers are anticipating rate cuts in September (Fed and ECB) and August (BoE).
- The upcoming ECB meeting is expected to confirm this anticipated step without making a commitment, after considering the final HICP print.
- The UK’s inflation and labour market data are the most crucial factors to inform the decision in August, following June’s finely balanced decision.
Labor Watch: This doesn’t exactly scream recession (yet) …
- Welcome to this short labor market watch on the back of this week’s NFIB and CPI numbers.
- Currently the labor market has softened considerably from tight conditions in 2022, yet there is still some time before this slowdown potentially leads to a recession.
- From the NFIB numbers we already got more hints of the deflationary trends suggested by this month’s CPI report as price plans continue their decrease.
US CPI Inflation 2.97% y-o-y (consensus 3.1%) in Jun-24
- US CPI inflation for June 2024 is 2.97% y-o-y, which is below the consensus and shows successfully moderating inflationary pressures.
- Core inflation is higher at 3.3%, but the monthly impulse has reassuringly slowed to 0.1%.
- Mixed PPI trends indicate some price pressures persist, but the Fed is increasingly likely to cut in September.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Will Presidential Election Cycle Theory Fuel Continued US Equities Rally in 2H 2024?
- Yale Hirsch’s Presidential Election Cycle theory posits that US equities perform best in third year followed by the election year. Equities are weakest in the year following the election.
- Over 6 decades, the S&P500 delivered positive returns in thirteen of sixteen election years. On average, the index returned 4.1% during 1H followed by 3.2% in 2H.
- Forget this theory, markets are pricing an 88% chance of rates being slashed starting Sep. Citi analysts expect 200bps of cuts over 8 meetings. Euphoric markets will go on steroids.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
