China vs US: Who will win in the race for global digital supremacy?

Over time the definition of quality has broadened and become subject to a variety of interpretations, with sometimes significant divergence in the performance of quality strategies depending on market conditions.

Inflation may be like gum on your shoe – annoying and, above all, hard to remove. Sticky inflation is a scenario that has been in the cards for quite a while already but now seems to receive more weight as a probable outcome. There are six reasons for this display of stubbornness which may disappoint those who thought inflation would come off easily.

The euphoria in the financial markets has been driven by falling expectations of a severe recession. Although our models continue to indicate a US recession, this is likely to begin later in the year. This means there is no contradiction in the equity overweighting that is currently suggested by our model.

The yield curve and our models point to a high probability of recession. But how severe will the U.S. recession be? To answer this question, we exploit historical data to examine the impact of the tightening cycle on GDP growth. The results show that investors should exercise caution in 2023.

The markets are still unimpressed by the approaching recession. This is the case even though aggressive interest rate rises, an inverse yield curve, the global “contraction” status of the Wave, and the similarities between the current market environment and 1989 as highlighted by our risk model all clearly suggest that 2023 is likely to see economic collateral damage.

Market participants are eagerly awaiting the Fed meeting in mid-December. How it chooses to tackle inflation will determine the severity of the recession, which our models – especially the Wave and the risk model – are now clearly signaling.