The Great Return to work?, Inflation looks to be headed lower and Global business cycles continue to diverge

The Great Return to work?, Inflation looks to be headed lower and Global business cycles continue to diverge

Most data is pointing towards improving supply constraints in both physical goods and the labor market, likely implying declining inflation in the near-term. Russia has shut down the NordStream pipeline further exacerbating Europe’s energy concerns. The worlds major economies, the US, Europe and China are all in different phases of the business cycle. Investor sentiment in the US remains quite Bearish.

1. After the “great resignation” workers are returning to the labor force.

Source: Daily Shot from 9/6/22 to 9/9/22

2. Prime age workers who may be benefitting from a return to in-person learning for their kids are nearly back to their pre-covid labor force participation.

Source: Daily Shot from 9/6/22 to 9/9/22

3. This hidden “slack” is adding supply and helping cooling wage increases.

Source: Daily Shot from 9/6/22 to 9/9/22

4. Physical goods supply continues to come in balance as well.

Source: Daily Shot from 9/6/22 to 9/9/22

5. Russia completely shut down the Nord Stream Pipeline.

Source: Daily Shot from 9/6/22 to 9/9/22

6. Adding pressure to a Eurozone economy which has been struggling this year.

Source: Daily Shot from 9/6/22 to 9/9/22

7. Except for Russia – their unemployment rate is fantastic – Just ask them!

Source: Daily Shot from 9/6/22 to 9/9/22

8. Recent economic troubles in Europe extend an improbably long run of US Equity outperformance.

Source: Daily Shot from 9/6/22 to 9/9/22

9. China, whose economy is likely already in Recession, is hoping to stimulate in stark contrast to the developed world which continues its crusade against inflation.

Source: Daily Shot from 9/6/22 to 9/9/22

10. By most measures fear still dominates investor psyche

Source: Daily Shot from 9/6/22 to 9/9/22

Source: Daily Shot from 9/6/22 to 9/9/22