Global markets turned bullish in 2022’s fourth quarter, rebounding from their October 2022 lows due to continuing dollar weakness, headlines on China’s re-opening and the belief that global inflation had peaked and the US economy may well pull off a soft landing despite high interest rates.
Investors have been anxiously looking for evidence that a US Fed policy pivot is coming, but unfortunately the recent data releases will give them reason to think again. Evidence of the US economy slowing down significantly under the weight of restrictive interest rates came from the Institute for Supply Management’s new orders index, a broad gauge of the health of the manufacturing sector, which fell to 42.5 points, the lowest reading outside of an economic recession in 72 years...