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:
Dave: The story of the past year has been real rates exploding from negative territory into positive
Source: TS Lombard as of September 2023
Joseph: which has FINALLY moved real rates into the same ballpark as inflation breakeven rates
Data as of September 2023
John Luke: The spike in rates has had barely an impact on the income statements of large corporations
Source: WSJ as of 09.23.2023
John Luke: and has in fact led to a boost in profitability as those firms gain extra interest income
Source: Guggenheim as of 09.23. 2023
Beckham: The excess savings accumulated by US households has been depleted for the lower income population
Data as of September 2023
John Luke: but overall, total bank deposits are still well above the trendline of recent decades
Source: Strategas as of September 2023
Brad: Weakness in defensive equity sectors doesn’t fit with a recession story
Source: Strategas as of September 2023
Brad: reinforcing the set of signals that has distinguished between soft and hard landings in the past
Source: Sevens Report as of 09.27.2023
Brad: Broad use of oil as an energy source is not expected to radically change anytime soon
Source: Strategas as of 09.25.2023
John Luke: and thankfully US consumers are still in an OK position to weather possible price spikes
Data as of September 2023
Dave: We often talk about the drag from the “volatility tax”, we generally refer to long-term compounding but the 2022-23 stretch gives a taste of the impact
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