Read our market review and find out all about our theme of the week in MyStratWeekly and its podcast with our experts Stéphane Déo, Axel Botte, Aline Goupil-Raguénès and Zouhoure Bousbih.
Topic of the week: Economic inconsistencies
- Survey data is deteriorating rapidly and pointing to a black economic future. Conversely, “hard” data is resilience. This “sentiment”/“reality” gap is unusual;
- Paul Samuelson suggested the “revealed preference theory”,rather than asking economic agents for their preferences, we look at their concrete choices;
- If companies say they are pessimistic they do not act accordingly and take bets that commit to the future. The coming recession could therefore remain moderate.
Market review: Powell prolongs the monetary cycle
- Fed: slower but longer monetary tightening;
- BoE already under pressure to stop tightening?
- Sharp rise in equities on hopes of China reopening;
- Tensions on bond yields amid upbeat credit markets.
Stéphane Déo's podcast
- What can be learned from FOMC?
Chart of the week
The market has recently played with the idea of a reopening of China and in particular the idea that China would use a foreign vaccine, one much more efficient.
Recent data on the number of cases does not seem very encouraging in this regard. The number of cases is accelerating strongly and while the level is still far from the peak at the beginning of the year, the trend is unquestionably worrying.
We remain very skeptical about these expectations of a rapid reopening of the Chinese economy.
Figure of the week
ESG debt as of Q3 2022, which was $3 trillion in Q3 2021 and 1.5 trillion in Q3 2020.
ESG issuance reached $950 billion over the first three quarters of 2022.