Note from the CIO - Recession Deferred But Not Cancelled

• Recent US economic data suggest that growth remains buoyant as there is particular resilience in the labor market and strength in services. Unfortunately, stronger growth is simultaneously raising the odds of persistent inflation as the latest figures have come in higher than expected as well.

• In contrast, the feedback from companies during this current earnings season has been one of slowing growth and lower inflation. This has been reflected in weak aggregate guidance from management teams.

• So, which outlook are we to give greater credence?