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Day Hagan/NDR Smart Sector® with Catastrophic Stop Strategy November 2022 Update

BY BRIAN SANBORN
Day Hagan/Ned Davis Research Smart Sector® with Catastrophic Stop strategy, model and allocations update. Read more →

Thoughts From the Divide: Attribution

BY JON WEBB
In April of last year, Huw Pill caught flack for saying that Brits “need to accept that they’re worse off”. This was followed by John Authers coming to the defense of the pilloried BoE chief economist. As we wrote, Authers noted that the comments were taken out of context and explained that the BoE’s Chief Economist was describing how “after a few external shocks, inflation becomes a collective action problem” where “ideally everyone would take a share of the hit, and then they can move on. Human nature isn’t like that, and as a result, economics isn’t like that”. Now, roughly a year later, the BoE’s Catherine Mann has picked up Mr. Authers’ baton. It turns out that people who can maintain their standard of living will tend to do just that! Bemoaning the “challenge” of bringing inflation back to target, Mann said there was “a lack of consumer discipline” to rein in businesses’ pricing power, Read more →

Thoughts From The Divide: Adjustments

BY JON WEBB
Last week’s excitement in bond markets came courtesy of Governor Waller offering a mechanical rationale for rate cuts. Simply, “If inflation goes down, you would lower the policy rate.” This came, of course, in the context of warnings about financial conditions and other caveats, but as is so often the case, what the markets heard was “so you’re telling me there’s a chance?”. That doesn’t mean that we disagree with the market’s read of where the Fed’s head is. Fed Governors don’t make too many boo-boos with their messaging, and when they do, it’s often an error of timing rather than content. The market has now priced cuts down to “around 4% by the end of 2024” and while that seems perhaps overdoing the enthusiasm a tad, we suspect that the market has gotten the gist about right.  Read more →
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