The “R” Word: What Powell and Markets are Telling Us
By Citi Wealth Insights |
The upheaval in the world economy over the past two years has broken many “rules of thumb.” Whatever the semantics over the term “recession,” investors should be more concerned about the outlook for both labor markets and corporate profits beyond the slowing that has already transpired.
CIO believes European markets have priced in an economic slowdown, but not a recession. If there was a further significant reduction to gas flow to Europe, CIO could expect another 10% contraction in European EPS over the next 12 months and further downside to European markets, especially across energy sensitive sectors.
As asset allocators and risk managers, CIO looks to historical data, economic conditions and the behaviors of decision makers to guide their decision making. No two periods are identical but contrasting moments in time can be illuminating.
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