Andreas Steno & Marko Papic: The Anti-Davos Trade

TL;DR

Real wages are increasing, leading to positive consumer sentiment and potential economic growth in 2023.

Transcript

but what a median investor seems to not understand is that when real wages are negative you know consumption is supposed to be negatively impacted by that but it wasn't in 2022 so basically American consumers bridged five six quarters of negative real wage growth with access to credit and by dipping into savings now a whole bunch of barriers of Fin... Read More

Key Insights

• 🪛 Real wage growth is driving consumer behavior and economic growth in the US.
• ✳️ Easing geopolitical risks and policy constraints create opportunities for risk assets in 2023.
• ✋ Decreasing CPI signifies higher real wages and potential profit margin stability.
• 💳 Access to credit and consumer spending have mitigated the impact of negative real wage growth.
• 💱 The FDA may adopt a cautious stance in response to changing economic conditions.
• 🏣 Emerging markets, Chinese, Japanese, and European assets are promising investment opportunities.
• 🧑‍🏭 Political and economic factors may influence FDA policy decisions in 2023.

Questions & Answers

Q: How has access to credit and consumer behavior impacted the US economy in 2022?

Access to credit and consumer willingness to dip into savings have counteracted negative real wage growth, sustaining economic activity in 2022 despite challenges.

Q: Why is the decrease in CPI viewed as a positive development for the economy?

The decrease in CPI signals higher real wages, potential profit margin stability, and increased availability of money for financial assets, boosting economic prospects.

Q: How might the FDA react to the changing economic landscape in 2023?

The FDA is likely to adopt a wait-and-see approach as CPI decreases, possibly avoiding aggressive rate hikes due to political and economic considerations.

Q: What potential opportunities do emerging markets and European assets present for investors in 2023?

Emerging markets, Chinese equities, Japanese equities, and European assets could offer attractive investment opportunities in 2023 due to favorable economic conditions.

Summary & Key Takeaways

• Real wages in the US are rising, fueling positive consumer behavior despite negative wage growth.

• The easing of geopolitical risks and policy constraints in 2023 could create opportunities for risk assets.

• Predictions for 2023 include lower CPI, increased wages, and potential economic growth.