PAMC News and Press, Pacer Lunt MidCap Multi-Factor Alternator From 01/26/23

Summary The S&P 500 is very expensive on a PE multiple basis. The index is also very expensive relative to the 10-year rate. This is for earnings growth that is deteriorating. The next leg of the bear market could be here, as investors begin to turn their attention awa...

Summary After a 3.0% expansion in 2022, world real GDP is now projected to increase 1.9% in 2023, up from last month's forecast of 1.6% growth. Monetary tightening, cooling demand, and supply chain resilience are driving disinflation. Declines in industrial commodity prices are now movi...

Summary Tightening monetary policy drove rising 10-year Treasury bond yields and pressured equity valuations in 2022. Interest rates will drive the market environment, to some extent, according to our U.S. growth and core equity and U.S. value equity teams. Given the lagged impact, ...

Summary Past episodes of debt ceiling histrionics have resulted in temporary government shutdowns. With both sides seemingly dug in, a repeat of the 2011 episode cannot be ruled out. In 2010, republicans controlled the House and demanded that President Obama negotiate over deficit r...

Summary Reserve provisioning by banks against the likelihood of further deterioration in their consumer and small business loan portfolios. Analysts’ earnings estimates are finally catching up to the market, which decided already in 2022 that conditions were headed south. The...

Summary Looking at the most recent readings of many economic indicators, nowcasting gives a more up-to-date reading of the economy than gross domestic product. The weakest US sector is housing. Building permits have been on a downward trend for much of 2022 and dropped again in December...

Summary Many investors are happy to be moving on from the market volatility of 2022, which left a mere few good places to hide. Hitting the so-called “sweet spot,” US mid caps - generally defined as companies with market capitalization between US$2 and US$10 billion - can ...

Summary Falling wages reduce the odds of a 1970s style outcome. The biggest lesson for me was the sheer uncertainty of the future. We keep threatening to default on ourselves over a self-imposed constraint that doesn’t actually constrain anything. Here are some thin...

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...