The attached note takes a look at seven charts we see as critical for the investment outlook. The key points are as follows:
While we are optimistic on a 12-month horizon, shares remain at high risk of further falls and a re-test of their June lows in the short term given hawkish central banks (including the RBA), heightened recession risks and geopolitical risks.
Seven key global charts worth keeping an eye on by investors in assessing the investment outlook are: global business conditions PMIs; US inflation and our Pipeline Inflation Indicator; unemployment & underemployment; inflation expectations; earnings revisions; the gap between earnings yields and bond yields; and the US dollar.