Looking at the big picture
The Macro Dashboard provides a quantitative snapshot of the state of the U.S. economy and markets. With a consistent scorecard, investment committees can use this tool to evaluate periodic changes in conditions, prioritize research and drive dialogue that ultimately results in better informed portfolio strategy.
Inflation: Inflation expectations rose slightly, but long-term inflation expectations remain in our yellow band.
U.S. monetary policy: - U.S. monetary policy is mixed, as current interest rates are restrictive. However, financial conditions relatively remain loose.
Economic activity: - Economic activity weakened and as such we have changed our color-coding from green to yellow. Consumer expectations have worsened, dropping to the 66th percentile from 39th in November. Economic surprises also declined, leading to our more cautious ranking. Household debt service and housing cost remained consistent.
Employment: - Employment remains green as jobless claims and job openings were largely unchanged as levels reflecting a robust labor market.
Investor sentiment: - Investor sentiment improved from red to yellow due to a significant improvement in broad investor sentiment. Individual investor surveys also improved.
U.S. equity fundamentals: - U.S. equity fundamentals remain mixed. The S&P 500 forward P/E marginally improved, while earnings expectations continued to climb. Revisions to expected earnings drastically improved, buoying market expectations.