At Shell Capital, our focus is pure quantitative analysis of price trends, momentum, volatility, and how global markets interact with each other. When it comes to macroeconomics, I resource macro data from firms like our broker and custodian, Goldman Sachs, world renowned for its fundamental macro research.
Goldman Sachs has lowered its probability for a US recessions further, giving just a 20% chance of recession.
In a note to us today, they said:
The probability of a US recession has fallen further as both recent data and ongoing fundamentals point to rapid—and mostly painless—disinflation from here. We don't share the concerns about yield curve inversion as a recession predictor because;
1) the term premium is lower than normal,
2) there is a plausible non-recession path to cuts, and
3) we think rates investors, like forecasters, have yet to take the recent signs of a soft landing fully on board.
Despite notable risks of recession, Goldman Sachs has been right so far, as the other leading global investment banks like JP Morgan and Morgan Stanley have been bearish, and wrong, so far.
We'll keep messing around, and finding out...
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