Singer Capital Markets’ Jamie Constable talks to Vox about the implications of recent strong economic data in the US and UK, why the UK banks may be overcautious in their outlook, and how February’s correction could prove a “healthy” starting point for the markets’ next leg upwards – particularly for unloved consumer stocks.
(0:37) Strong US economic data, the receding threat of recession and the likelihood of higher terminal rates
(1:31) What that means for markets after a strong rally since October, and the recent “healthy” correction before another
(2:54) Results from the UK banking sector and the implication for the UK economy based on their large bad loan provision, implying caution on the housing market
(4:00) The importance of the jobs market strength in the UK and US, and the dichotomy between the manufacturing and services sectors
(7:38) The difficulty for central bankers in interpreting conflicting economic data, and the wealth effect from higher rates for older demographics driving strong consumer spending on retail and leisure
(10:09) How that could potential represent a two-speed economy, and the risks of central bakers raising rates too aggressively
(12:17) Why projections of rising unemployment – and the negative impact on the housing market – may be wrong,
(12:50) Why commentators are suggesting CPI could fall away quickly this year – to 2% - and why that could further boost consumer-facing sectors as interest rates retreat
(17:13) What weak manufacturing PMIs are telling us, and why they may not be taking into account the huge need for infrastructure investment and ‘green’ spending
(18:47) How geopolitical security-led reshoring and near-shoring could support the construction industry, particularly around high-end components including chip manufacturing
(20:25) What’s coming up on the central banking front?
(22:17) The outlook for UK wages, and why the likelihood of moderate public sector wage rises is unlikely to prove inflationary
Singer Macro Monthly: a “healthy” February correction
Feb 23, 2023Disclaimer & Declaration of Interest
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