But the truth may be in between, writes Martin Pelletier. Read more
Overall, it wouldn’t surprise us to see an improvement in inflationary pressures in the months to come as we’re already witnessing a sizable drop in commodity prices. For example, corn, wheat and steel prices are down 30 to 40 per cent from their highs putting them at levels seen before the Russian invasion of Ukraine. At the same time, oil and gasoline prices are also falling, easing pressure on the U.S. consumer.
The mixed data makes it difficult to determine at what point the pace of rate hikes will slow and eventually end. Complicating matters, we think commodity prices will continue to exhibit volatility, as scarcity of supply and worries over demand create periods of higher and lower inflation. At the same time, we worry that those most exposed to duration are allowing their confirmation bias to take over resulting in one-ways bets all dependent on a Federal Reserve pivot.
Again, one can cherry pick the data that best fits your view of the markets. The bearish will look at disappointing Walmart Inc. numbers while the bulls will cite Apple or Amazon’s better-than-expected Q2. Apple announced a beat on both revenue and profit and expects growth to accelerate., is still expecting impressive 13-to-17-per-cent growth in post-Q3 revenue.
Overall, we think this quarter is showing that the pace of growth is slowing in some areas and showing resilience in others. This is important especially considering the magnitude of multiple compression that has already occurred this year.From the valuation side, markets have clearly reset, with the S&P 500 P/Es falling from 23 down to 16.9 times . Based on historical data, it is pricing in 65 per cent of a recessionary correction.
Looking ahead, we see a lot of value in certain segments of the market such as the financials sector including Canadian and U.S. banks. We also like some of the S&P leaders like Apple, Amazon and Microsoft that are trading at somewhat attractive multiples especially now that they have just reported.Article content
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Beware of cherry pickers: Mixed economic data means bulls and bears both have strong casesBut the truth may be in between, writes Martin Pelletier. Read more
Read more »
Beware of cherry pickers: Mixed economic data means bulls and bears both have strong casesBut the truth may be in between, writes Martin Pelletier. Read more
Read more »
Mixed reaction to long weekend closure of Memorial Drive for pedestrians, cyclists
Read more »
Beware of cherry pickers: Mixed economic data means bulls and bears both have strong casesBut the truth may be in between, writes Martin Pelletier. Read more
Read more »
Beware of cherry pickers: Mixed economic data means bulls and bears both have strong casesBut the truth may be in between, writes Martin Pelletier. Read more
Read more »