Resumo do Relatório
TPW Advisory Friday Musings: Turn Signals
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As regular readers know we have been driving down the investment highway following our “Middle Path” directions for roughly a year. The Middle Path calls for a high nominal growth world that drives between high inflation and deep recession – the two main economic fears of the past year or more.
More recently we have highlighted the huge positive policy changes occurring throughout our Tri Polar World, policy changes that are being obscured by a Curtain of Fear, Uncertainty & Doubt – the famous FUD. Pulling back the curtain from SVB related (today read First Republic) systemic bank woes & credit crunch FUD, reveals the unfolding of such key issues as main DM Central Banks accepting a slightly higher inflation target, the rollout of US Industrial Policy for the first time in 70 years, Europe’s deepening integration across energy, defense & climate, Japan’s incipient move off YCC and China’s drive to realign its economic path more towards domestic demand rather than FAI or exports.
Last week we wrote “Crunch Time” noting how many issues across policy, the economy & markets are coming to a head: the end of the Fed rate tightening cycle, the likely end of the S&P’s long trading range, the battle between US equity sell side analysts who are raising estimates for 2H 23 and into 2024 vs the fixed income community who are calling for recession and significant rate cuts by YE.
Today, we want to highlight some turn signals we have noticed in our recent reading, signals we believe are pointing to a global economy that is picking up speed not slowing into global recession. Regional economies underpin that acceleration, led by Asia but now including Europe and a US that continues to suggest recession – either of the economic or earnings variety – is unlikely.
The same holds true for turn signals we see emanating from the corporate world & here viewed mainly through both an earnings & real business activity lenses. We have also picked up some turn signals from the market internals be they sentiment or technical in nature that we think are worth noting. We believe employing a wide funnel makes sense when an investment guru like Stan Druckenmiller says “it’s the most uncertain investment environment in my 40 + year career”.
So much as we do in our Monthly when we typically have 20-25 charts from 15-20 different sources, here we have also cast a wide net. We tried to keep it to a baker’s dozen but cut it off at 20 – note sources at end. We also added a bonus clip.
In no particular order:
Jay Pelosky
Estrategista Global - TPW Advisory
Nova York, EUA
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