JHML News and Press, John Hancock Multifactor Large Cap From 01/07/23

Summary Several estimates of fourth quarter economic activity for the US have turned higher recently. The odds that a recession has started, however, remain low, according to the current nowcast. Even if Q4 turns out to be stronger than some nowcasts suggest, headwinds are still blo...

Summary For 40 years, steadily declining inflation and interest rates buoyed equity returns. That changed abruptly last year. Investors must now adjust expectations to a new macroeconomic and market landscape that will require a fresh mindset to reach long-term goals. By...

Summary There seems to be a widespread view that employment is a lagging indicator of changes in the business cycle. The growth rate of payroll employment slowed sharply in the 6 months before the onset of recession. When there is no unexpected shock like Covid, it seems as though e...

Summary Cam Harvey, a professor at Duke University, downplays the risk of recession currently forecast by the negative spread of the 3-month yield less its 10-year counterpart. The yield curve (and its variations) still deserves to be on the short list of analytics for monitoring and fo...

Summary The inversion of 80% of the 10 economically important yield curves suggests a recession is likely. While many hope the Federal Reserve will “pivot,” such may not be as immediately “bullish” as many expect. As yields plummet, bond prices rise as in...

Summary Assuming the Fed follows through on hiking the Federal Funds Rate by another 0.5% tomorrow, the probability will resume rising rapidly. There are clearly building levels of distress in several sectors of the U.S. economy. 98% of CEOs surveyed by the Conference Board say they...

Summary Perspective is the number one biggest shortcoming in the coverage of financial and market news. I examine perspectives on inflation, rates and recessions. Lack of perspective stems from two causes: the lack of (or willingness to dig for) historical comparisons, or the&#...

Summary Recession is foretold, in our view, as central banks crush demand to bring down inflation. We think markets are wrong to expect them to later come to the rescue. U.S. stocks fell and the Treasury yield curve inverted its most since the early 1980s. We see recent moves as reflect...

Summary Overall, I think the markets had gotten to peak hawkishness and people were under-positioned because they were expecting a more and more hawkish Fed. This may be the tightest labor market, quite frankly, we’ve seen in five decades. This is the first proper recessionar...

Summary Today, the yield curve is more inverted than at any time since the early 1980s, so many are saying that means the chances of a recession are pretty high. Yes, today the curve is very inverted, but real yields are not particularly high. Low spreads suggest the market is relat...