* The disconnect between financial market pricing and the incoming (and forward-looking) data on US employment, business capital expenditures, credit and
The disconnect between financial market pricing and the incoming (and forward-looking) data on US employment, business capital expenditures, credit and student loan delinquencies, and consumer and business expectations, as well as subsequent consumption, is widening.
In a sound-bite, equity markets are back to near their highs of February 2025, (credit spreads again near their lows) whilst economic and earnings data over the last four-five months are all consistent with what even the US Federal Reserve now also admit; slightly higher inflation, growth expectations grinding lower, and higher geopolitical and trade risks. That all feeds (negatively) into global trade, business, and consumer confidence, and then consumption.
It's not what you know, it's what you think you know that can hurt you…
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