Back to basics: questioning assumptions after 2Q23

  • High inflation recessions see “money illusion”
  • All eyes on US labor market
  • Base case roadmap: 1969-70 high inflation recession
  • Monitoring rolling recession/expansion risks…
  • Equities: a pragmatic approach given Q2 under-performance
  • Tactical sector allocation: buy energy, sell homebuilder
  • Fixed income: tracking 2023 vs 1969-70 roadmap
  • China: crossing the river by touching the stones
  • EM: more bond upside, value in equities, cyclical headwinds yet to subside
  • Commodities: supercycle intermission ongoing + gold LPPL playing out
  • FX: USD continues to be buffeted by conflicting drivers
  • Credit: headwinds as QT finally starts to gain traction
Macro SnapshotTacticalCyclicalRecession