Worry List Update

Check out the accompanying pdf and chart collection. Executive Summary: Most investors and analysts are newly optimistic about the economic outlook and corporate earnings prospects. Like them, we see low odds of a hard landing anytime soon. That’s notwithstanding the yield curve’s ongoing recession signal. … But six worries, should they become more worrisome, could change our sanguine stance. We’re watching closely for fallout from the US commercial real estate crisis; a reinvigorated wage-price spiral; the off chance that consumers retrench; the soaring federal deficit, which could cause Bond Vigilantes to get more vigilant; and the possibility that Fed Chair Powell might take a page from predecessor Volcker’s playbook.