Perspectives

There was a growth scare in 3Q (especially in the U.S. and China), but as we move through 4Q growth looks to be reaccelerating. Yet price gains are continuing. U.K. CPI inflation rose to 4.2% y/y in Oct. The stagflation scare has morphed into a “sticky” inflation concern in numerous locations. “A trio of policy makers – Vice Chairman Richard Clarida, Governor Christopher Waller and St. Louis Federal Reserve Bank President James Bullard – signaled … that the topic of a faster taper m… View More

We came across an interesting article from one of our research providers this week and thought we would share it with you. This piece makes an interesting argument for why commodities and materials may be among the better performing investments for the next few years. Although so much of the media’s coverage these days seems to focus on social unrest or geopolitical conflict, there are still nuggets of information that may help identify investment opportunities. Since the start of quantitativ… View More

We believe we are seeing the peak in the 2021 stagflation scare, with the 3Q data reports from the U.S. last week & the weak China manufacturing PMI in Oct. There’s still plenty to worry about, as growth has stalled & bottlenecks keep inflation elevated. Wage pressures are building. Energy prices remain elevated. Yet these stories are becoming well known. There are key positives for economic growth. European 3Q GDP data was solid q/q. The U.S. yield curve is not inverted & consume… View More

There’s plenty to worry about, as global growth has stalled but bottlenecks keep inflation elevated. Wage pressures are building on the back of recent inflation data (eg, U.S. strikes, German union negotiations). We continue to watch for “peak bottleneck”. The Atlanta Fed’s tracking estimate for U.S. real GDP in 3Q is down to 0.5% q/q A.R. The quarter appears to have been quite weak, both in the U.S. and abroad (eg, China GDP reported at 0.2% q/q in 3Q). U.S. industrial production plung… View More

We may be approaching “peak bottleneck”. The Atlanta Fed’s tracking estimate for U.S. real GDP in 3Q is down to 1.2% q/q A.R. Separately, U of Mich consumer sentiment remained depressed at 71.4 in October. Yet, we are seeing early signs that the global production & transportation situation, while not close to being solved, may finally be turning. U.S. initial jobless claims falling to 293,000 last week suggest an inflection. This doesn’t make the inflation we’re seeing now (eg, Sep… View More

Given bottlenecks and supply constraints, we are continuing to see a stagflation scare (weaker growth + sticky inflation) in the global economy. Concerns are likely to persist into 2022. But as firms change the way they do business to combat this issue, output-per-hour (productivity) gains are starting to occur. Productivity allows the opposite of stagflation: stronger growth and muted inflation since there are more goods & services produced. Put another way, straining the economy in ways it… View More

DEMOCRATIC DIVISIONS OVER THE SPENDING PACKAGE EXPLODED OVER THE WEEKEND Last Thursday Strategas (one of our research partners) outlined all of the troubles Democrats were having in moving their agenda forward and that the infrastructure vote was likely to be delayed. The delay of the infrastructure package did materialize but during that process, we saw a level of optimism emanating from Congressional leadership that a deal could take place on Friday. Senator Manchin put out his price tag Thur… View More

With inflation a key concern for most investors, we wanted to share a paper we read this week written by Bob Doll at Crossmark Global Investments. We thought it was a great review of what is happening with inflation now. Read Story   … View More

Global supply chain struggles have persisted in 3Q, and look set to linger for at least several more quarters. Energy prices have surged in Europe, and transportation issues are creating petrol lines in the U.K. Data from China have shown notable disruptions, though fears of financial contagion came and went quickly last week. “U.S. shipping operations remain clogged as ports, truckers and warehouses can’t find enough workers or agree on 24/7 operations … Tens of thousands of containers a… View More

A black swan event in the investment world is an extremely negative and usually hard to predict event; "Evergrande" has been labeled by some as just such an event. It is the latest event in China to affect the US and global markets. Many US investment banks like Morgan Stanley, Goldman Sachs, and Bank of America Merrill Lynch have exposure to “Evergrande”, and their stocks are paying for it today. These companies represent more than 120 points of the loss on the Dow Jones Industrial average … View More