CBSE News and Press, Changebridge Capital Sustainable Equity From 01/16/23

Summary One of the big stories late last fall was the abrupt about-face turn by the Chinese government on its zero-Covid policy. There is a connection of sorts tying together the newfound fondness for Chinese and European assets. Small-cap domestic stocks do still seem to demonstrat...

Summary Easing supply chain pressures are evident in supplier delivery times, which have been rising at a slower pace recently. Labor shortages did not ease much even as demand weakened. Weak demand conditions are likely to continue limiting companies' ability to sustain high wage g...

Summary The long-term leading indicators of growth and liquidity suggest corporate earnings and profit margins will continue to be pressured throughout 2023. However, as the lags from leading indicators tend to be long and variable, we may not see a material impact in earnings growth un...

Summary Financial conditions indicators are flashing risk embracement and loose conditions. Markets have been so speculative in recent years that squeezes have become commonplace. While powerful squeezes captivate the marketplace, potential accident catalysts make steady headway. ...

Summary Since October 13, 2022, the S&P 500 Index is up 11.80% on a price only basis. For the start of 2023, the S&P 500 Index is up 4.16% through January 13, 2023. As we noted in our recently published Winter Investor Letter, maybe the negativity around the market/economy is ov...

Summary The Federal Government ran a deficit of -$85B in December. While this was much smaller than the deficit posted in November, it marks one of the largest December deficits ever. Zooming out and looking over the history of the budget back to 1980 shows a complete picture. It shows ...

Summary Inflation is likely to continue moderating, particularly if consumers exhaust excess savings later in the year. Labor markets are not as strong as they may appear and are likely to weaken further as corporate profits come under pressure. Equity markets do not appear to be pr...

Summary Stocks have rallied to start the year due to financial conditions easing. The Fed, to this point, has been unable to convince the markets of its commitment to raise rates. Vice-Chair Lael Brainard speaks this week and could be personified to reset market expectations. ...

Summary Markets may be underestimating the stickiness of inflation and central banks’ determination to beat it - and what that means for growth and corporate earnings potential. We favor fixed income and credit over equities, and investment grade over high yield. Should infla...

Summary The CPI cooled again in December driven by a massive fall in Energy prices. A big driver behind the fall in Energy prices has been the Strategic Petroleum Reserve. Lower inflation is “good for gold” as the Fed can theoretically pull back on hikes. ...