Lykeion Research - October '23

The Bear and Bull Case into Year End, the 2030 Portfolio, and Should Japan Defend the Yen?

Lykeion Research - October '23

The Bear Case into Year End

So What: Earnings revisions have been collapsing, earnings season has so far been underwhelming, and geopolitical risks have increased by the day. What to own in a bearish outlook?

 The Bear Case

 The economy is still in the window of transition between last year’s price shock and a potential economic growth shock in 2024. As we wrote last month, the time frame between the first rate hike and the onset of a potential recession is well within the historical norms, but that window is closing.

Complementing this, Gavekal Research recently posted a range of lags between the recession signal and the onset of recession.

There is an increasing risk that relatively isolated pockets of disruption begin to spread across the broader economy.

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