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Earnings expectations have diverged for the S&P 7 and the S&P 493, see chart below.
Source: FactSet, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Markets fluctuate between the “lagged effects of Fed hikes are slowing down consumers, firms, and bank lending,” and “the easing of financial conditions since the December Fed pivot has boosted growth, including January hiring,” see chart below.
The bottom line is that what currently looks like a soft landing is a fragile equilibrium, and there is still more than 50% chance we will end up in either a hard landing scenario where the Fed cuts faster than the market expects or a no landing scenario where the Fed has to raise rates again. It makes sense that rates volatility and swaption volatility are high relative to VIX.
Source: Apollo Chief Economist See important disclaimers at the bottom of the page.
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China began its one-child policy in 1980 and ended it in 2016. In 2021, it started its three-child policy, encouraging couples to have three children. The UN projects that China’s population will decline from 1.4 billion today to 800 million by the end of this century. China’s demographic headwinds have significant implications for growth, savings, and FX reserve accumulation and, therefore, Chinese appetite for buying US Treasuries.
Source: UN, National Bureau of Statistics of China, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Our latest outlook for the housing market is available here, key charts below.
Source: Apollo Chief Economist 
Source: Haver Analytics, BLS, S&P, Apollo Chief Economist 
Source: Apartmentlist.com, Apollo Chief Economist 
Source: Realtor.com, Apollo Chief Economist 
Source: MBA, Bloomberg, Apollo Chief Economist (Note: It is 5-year ARM) 
Source: Census Bureau, FRED, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Our updated banking sector chart book is available here, key charts below.
Source: S&P Capital IQ, Apollo Chief Economist 
Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist 
Source: FDIC, Apollo Chief Economist 
Source: FDIC, Apollo Chief Economist. (PDNA stands for Past Due and Non-Accrual rate defined as loans that are past due and are in non-accrual status.) 
Source: FRB, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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About 18% of China’s population is older than 60. Over the coming decades, that share will rise to 32%, higher than in the US, see chart below. Our latest outlook for China is available here.
Source: UN, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Comparing the growth in private credit with the growth in other sources of financing for corporates shows that private credit has been growing much slower than public credit and credit extended by banks, see chart below.
Source: FRB, ICE BofA, Bloomberg, Preqin, Apollo Chief Economist. (Note: Public credit markets include HY, IG, and leveraged loans. Bank lending includes loans & leases in bank credit. All commercial banks and private credit is dry powder + unrealized value/NAV of all the funds in the private debt space.) See important disclaimers at the bottom of the page.
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The average number of people per household continues to decline, see chart below.
Source: Census Bureau, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The share of consumer spending that takes place in December has been steadily declining for decades and now makes up less than 10% of total private consumption, see chart below.
The reason is that consumers spend less money on goods and more money on services such as restaurants, hotels, airlines, concerts, and sporting events.
Source: Census Bureau, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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More than 50% of all ETFs and mutual funds are passive, and 37% of fixed income funds are passive, see charts below. Numerous studies show that active mutual fund managers continue to underperform their benchmark, see for example here, here, and here.
Source: Bloomberg, Apollo Chief Economist 
Source: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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