Our team looks at a lot of research throughout each day. A few charts that caught our eye this week, and the way they fit the unfolding puzzle of evidence:
JL: stock prices have generally tracked earnings revisions this year, with a clear bias towards compressing valuations
Source: Strategas as of 11.07.2022
Brad: and the energy sector continues to be immune from 2023 estimate cuts
Joseph: while the companies themselves have been confirming that trend, with much lighter hedges than in recent years
Dave: while also keeping employee count much more restrained vs. other sectors
Source: Strategas as of 11.07
JD: speaking of restrained, the cost of hedging against sharp equity selloffs has gone nowhere this year
JL: though the good side of lower valuations is higher potential returns in the future
Dave: everyone is watching employment, but in recent cycles job losses haven’t come until well after the Fed stops hiking
Source: Strategas as of 09.30.2022
Dave: the NY Fed’s “recession model” is showing increased risk of a recession
Source: Morgan Stanley as of 11.07.2022
JL: yet nominal GDP is cruising along
Data as of 10.15.2022
JL: Thursday’s CPI report sent shockwaves through the rates market
Data as of 11.10.2022
Brad: with future Fed Funds expectations reacting immediately across the board
Source: Strategas as of 11.10.2022
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