Quick HOPE Update! We continue to see the HOPE cycle play out in this downturn at a rapid pace. Today’s COLLAPSE in the NAHB home builder index only further reassures us that the economy is heading into a long and challenging recession. We are now at the Profits stage of the HOPE cycle where we...

As this downturn unfolds, I can’t help but keep being reminded of how much of a mirror image the backdrop is today as compared to 2020 and 2021. Why didn’t we hear investors scream “it’s all priced in” when Pfizer announced vaccine news in Nov 2020 when: 1) the market was already at a new all-time...

Any time a “problem” (in this case high inflation) begins to improve, a “junk” rally in the area that was most negatively impacted by the problem is likely. We are used to “junk” value rallies at the bottom of the bear market as leading indicators of the economy turn up (PMIs) and junk value...

The last time small businesses saw inflation as this much of a problem (NFIB Survey) was back in 1979/1980. As inflation fell for small businesses, slower sales growth took over as the biggest problem in the early 80s as the economy fell into a recession. During that transition of peak inflation...

We’re in the midst of the 4th bear market rally of this bear market – we are likely to many more before we find THE bottom in 2023. We’re expecting bear market rallies to be fast and furious, rather than long and steady. This is because we’re in a tug-o-war between inflation and growth. And until...

How bad will the ISM miss? RH just reported and trimmed its outlook (i.e., estimates are TOO high) and the stock is down. That is going to be the pattern over the next several earnings seasons until investors right-size their earnings estimates, away from the bubble-driven 2021 numbers, towards an...

It’s safe to say that both the “H” (housing) and “O” (orders) segments of our HOPE framework are getting ugly. One client said our call, for fears to migrate from inflation to PMI/EPS/GDP, is now consensus. He asked, “so, what’s next?” The answer is profits decline and then employment (claims)...

The Piper Sandler Macro team is up in Toronto today, presenting our thoughts on how the evolving macro outlook will affect financial markets. We remain bearish on the outlook for equities, and continue to believe that markets will not find “the” bottom until we are within a few months of an...

The Fed is now back in the game, and we can go back to using the change in the Fed Funds rate as a leading indicator of PMIs/EPS/leadership trends. It’s nice to be able to use this oldie but goodie chart once again. With the Fed’s latest 75bp hike, and with another rise in the 10yr, our CCI index...