2023.03.13 Weekly Note

Cash is not trash

The NY Fed produces analysis that estimates the probability of a recession based on the term spread readings. At this point, their probability of a recession is rated higher than at any time since the early 1980s. In anyone’s language, the yield curve is at an extreme reading.

Wk43 Signal Alert - Buy the dip?

Starting from a macro level via our liquidity indicator - based on the relative movements of real yields versus inflation expectations, we can see deteriorating liquidity (tightening of financial conditions) and NDX to trade in a range with a slighly bearish bias through September. That trend diverged as NDX later broke