A warning from Wile E. Coyote

Market Ethos.
23 January 2023.

One of the most iconic Looney Tunes’ misadventures was the relationship between the Road Runner and Wile E. Coyote. The way the Road Runner always gets the better of the hapless coyote with his classic “Beep Beep” just as Wile E. happens to run off an unforeseen cliff into a deep gorge. Of course, with the delayed suspension midair before gravity suddenly decides to take over. Markets, like Wile E., can be so singularly focused on one thing (inflation) that they can for better or worse be oblivious to approaching danger (recession).

Markets are forward looking; they bottom well before the negative impacts of a recession ripple through the economy. At this point, the hope has been that cooling inflation is all that’s needed for markets to catch a bid. However, with all the focus on inflation (i.e., the Road Runner), markets may be overlooking the real risk of an economic slowdown. We touched on this in our recent Market Outlook.

Related articles


Don’t count out the loonie

April 15, 2024. Market Ethos. Remember the days when the loonie was on par with the U.S. dollar? After rising into year-end to finish 2023…

2 minute read

Market Ethos

Dividend disruption

April 8, 2024. Market Ethos. What makes this recent bout of underperformance of dividends versus the TSX unique? - Increased popularity of other yield sources…

2 minute read


Has anyone seen my IPO?

March 25, 2024. Market Ethos. With equity markets strong, there is no shortage of people talking bubbles, but some key ingredients are missing to label…

2 minute read