We are not there yet, but there is light at the end of the tunnel for the US economy
Hi Florian, interesting take. I noticed you never mentioned services and wages inflation. How would it go down if unemployment doesn't increase? What would the Fed do if core inflation sticks to a 3.5-4% range? I feel this is a missing puzzle piece in your otherwise bold take (bold since other smart people believe summer is when the recession finally accelerates).
You mentioned ISM manufacturing having good correlation with russell 2000. Why you choose ISM rather than Markit? You think ISM more accurate than Markit?
Excellent analysis, thanks!
Agree with A.I, would wait for the laggards to start catching up, though.
Yes, KWEB will be the place to be, sooner or later.
Nice thesis for a soft landing. Profit margins are declining, but if unemployment rises only a little bit until the next cycle possibly starts in summer, the Fed would have achieved their well communicated soft landing. Of course a lot of IFs, but not impossible at all.
If manufacturing turns, this should also pull up commodities later this summer?
Florian, you mentioned you are investing in Chinese tech stocks. Do you consider their accounting practice, nationalization by the state, risk factors?
Luke Gromen made the point that high interest rates IN-crease inflation (high debt level -> high income for private sector). This and your expectation of economy turning would mean Fed will have to increase rates even further?