Stuff im currently thinking about and what to keep in mind for the next while…
I’m less interested in whether the next headline gives us a reason to buy equities or sell bonds. There’s a bigger question underneath both, can the businesses driving this expansion keep earning enough to justify what it now costs to fund them?
The US data still make an outright recession call difficult. But growth holding up doesn’t mean the market gets an easy ride. Strong demand can support earnings while keeping money expensive, and an investment boom can create opportunities well beyond the companies everyone originally bought to express it.
That’s where I think the next phase gets interesting. Not simply whether the expansion survives, but who benefits and which parts of the market have already paid too much for that outcome.
Contents
Can US growth and earnings keep shrugging off higher real financing costs, and can Germany’s recovery pull Europe forward despite the energy squeeze and France’s fiscal mess?
Below, I work through what that means for rates, equities and FX and where the same global backdrop could leave us with very different trades in Australia and the yen.
Join up to gain access to www.globalmacromethod.com and discord
