Daily Insights

China Has An Outsized Influence On Commodities

September 13 2023

The CRB Raw Industrials Price Index has been relatively stable over most of 2023. To the extent that the index contains non-tradable raw materials such as burlap, hide, rosin, and tallow, it is less influenced by speculative activity than the prices of other commodities such as copper, iron ore, or steel. In this sense, the CRB index is a better gauge of physical demand for commodities.

Daily Insights

What Will Be The Key Drivers Of A US Earnings Rebound?

August 1 2023

It is widely expected by consensus that earnings growth will rebound into the year-end and into 2024. Multiple factors will drive the reacceleration in earnings growth.

Global Investment Strategy

Is The US Manufacturing Cycle On The Verge Of A Turnaround?

July 11 2023

A range of indicators suggest that the US manufacturing sector is currently under duress. But should this weakness be extrapolated into the rest of the year?The US manufacturing cycle tends to follow a very predictable wave-like pattern. Each cycle tends to be characterized by an approximate three-year wavelength.

Emerging Markets Strategy

The Reflation Indicator And The US Dollar

June 27 2023

Our Emerging Markets Strategy’s Reflation Confirming Indicator has been gapping down, signaling a material rebound in the broad trade-weighted US dollar.

Poor Fundamentals Will Weigh On Tech Hardware & Equipment

April 12 2023

According to a recent International Data Corporation (IDC) report, global shipments of traditional PCs dropped by 29% y/y in the first quarter of 2023. The decline was attributed to weak demand, excess inventories, and deteriorating economic conditions. In particular, Apple’s shipments bore the brunt of the weakness, dropping by 40.5% y/y.

Can European Equities Continue To Defy Banking Sector Risks?

April 05 2023

The European stock market is at risk. The tightening in global credit conditions suggests that global growth will be soft over the coming months, posing a threat to highly cyclical European stocks. Moreover, unlike those for the S&P 500, European earnings expectations have not yet declined. This dichotomy creates a real danger for European stocks, which stand close to an all-time high.

US Consumer Morale Firms

March 29 2023

The US Conference Board’s Consumer Confidence Index unexpectedly edged up from 103.4 to 104.2 in March, surprising expectations of a decline to 101. The Expectations component’s 2.6 point increase offset the Current Situation index’s 1.9 point decline.

Further Downside In Oil Prices?

March 22 2023

Oil has been among the key victims of the banking tumult. The price of Brent has fallen by more than $10/bbl from its peak earlier this month. Similarly, energy is the second worst performing equity sector since the bank fallout.

More Large-Cap Bank Failures Are Unlikely

March 15 2023

Since Silicon Valley Bank (SIVB) was seized by the FDIC last Friday, and Signature Bank (SBNY) was shuttered over the weekend, investors have been on pins and needles wondering how many more banks will fold.

A Period Of Indigestion For The Euro

March 08 2023

The euro has been giving back recent gains, despite the upbeat economic performance of the Eurozone. One of the most reliable trackers for the euro’s performance of late is the ZEW sentiment index. It surveys over 300 experts from banks, insurance companies, and financial departments of select corporations on the outlook for financial markets. Despite an increase in the Growth Expectations component to a one-year high of 29.7 in February, the euro collapsed, creating a rare divergence.

How To Spot An Equity Market Bottom

March 01 2023

This has been a difficult 12 months for investors: After the huge sell-off last year, risk assets have rebounded since October. So, is that the beginning of a new bull market, or just another bear market rally? How can investors tell the difference?

Will US Inflation Breakevens Decouple From Oil Prices?

February 22 2023

US inflation expectations from the fixed-income market typically track crude oil prices. Recently, however, the 5-year TIPS breakeven inflation rate (inflation expectations) has risen despite tame crude prices. Are we witnessing a short-term aberration or the beginning of a lasting divergence between these two?

European Investment Strategy

Why 2019 Is The Mirror-Image Of 2018

January 10 2019

The year of 2019 will be the investment mirror-image of 2018. Start with a pro-cyclical tilt, but expect to shift gradually to pro-defensive as the year progresses.