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Charting a course in choppier waters
At the start of 2023, consensus expectations were decisively negative and reflected a high likelihood of a recession. A string of positive economic surprises, along with excitement around artificial intelligence (“AI”), fueled strong equity market performance throughout the first half of the year. By July, a soft-landing scenario for the economy had become the dominant narrative priced into equity markets. Now, market focus has started to shift towards concerns over policy rates remaining higher for longer. While avoiding a recession still appears achievable, alternative indicators suggest that economic surprises ... (full story)