China

Near the half-year mark, it is safe to say 2023 has been different than 2022 for equity investors. After being brought down in bear market territory by Europe’s energy crisis and sudden global shift to hawkish monetary policy in 2022, the S&P 500 was…

3 years ago

FICC

Manufacturing PMIs, The Real Economy, And Commodities

Slowing manufacturing PMI indices globally indicate the slowdown in economic activity will persist. Manufacturing demand for commodities will also soften, weighing on industrial commodity prices. Geopolitical tensions and the race to the green energy transition will upend enmeshed global supply chains, which will also impact manufacturing activity. It is possible that stimulus in China will arrest the decline in the state’s manufacturing activity, which will have positive spillover effects to its key trading partners.

3 years ago

Commodities China

Essentials

Chinese Exports Return To Contraction

Chinese trade data delivered a disappointing signal about the global manufacturing cycle. After a brief rebound in March and April, exports dropped by 7.5% y/y in USD terms last month – below consensus estimates of a 1.8% y/y decline. The decrease was…

3 years ago

Essentials

Will EM Stocks Continue Underperforming?

After a brief period of outperformance in late-2022/early-2023, Emerging Market stocks have been underperforming their Developed Market counterparts since January 19. While the DM equity benchmark is up 6.9% over this period, the EM index has lost 4.0% in USD…

3 years ago

China

Essentials

US-China Tensions Are Still High

The Biden administration reached out to China to try to reduce tensions over the month of May, attracting interest from the investment community, though our Geopolitical Strategists believe the US and China cannot agree to a genuine strategic détente until…

3 years ago

China

Essentials

Leading Indicators Bode Ill For Global Manufacturing

The Global Manufacturing PMI was unchanged at 49.6 in May – below the 50 boom-bust line for the ninth consecutive month. The details of the release were mixed. On the one hand, the Production sub-component rose to an 11-month high of 51.5. On the other hand,…

3 years ago

Essentials

China Poised To Launch Stimulus

Our colleagues in BCA's Commodity & Energy Strategy (CES) service expect the Chinese Communist Party (CCP) to announce a new round of policy stimulus to re-boot the economy, in an effort to escape a prolonged liquidity trap and address continued…

3 years ago

Essentials

May In Review

Global financial markets relapsed in May. After a relatively strong start to Q2, most of the major financial assets we track generated below average returns last month. A shift in investor expectations for the path of the Fed funds rate, the resurfacing of…

3 years ago

CoreMacro

Is China In A Liquidity Trap?

Symptoms of a liquidity trap for Chinese households are appearing. Our proprietary indicators for the marginal propensity to spend among households and enterprises continue falling. There has been a paradigm shift in Beijing’s approach to policy stimulus. Authorities will be slow to introduce large stimulus. Hence, China-related financial markets are set to fall further.

3 years ago

Emerging Markets China

Portfolio

Monthly Portfolio Update: Where Could We Be Wrong?

Risk assets would perform well over 12 months only if inflation falls to 2% without triggering a recession. That would be unprecedented. We recommend investors stay defensive.

3 years ago

China

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