Economy

What’s going on? The market-weighted stock market is up. But the equally-weighted stock market is not up. Neither is credit. Neither are industrial metal prices. Neither is the oil price, despite two waves of OPEC output cuts. We explain the dichotomy. Plus: European basic resources stocks can rebound, but Netherlands is likely to reverse.

3 years ago

Essentials

Falling German Factory Orders: Bad News For Eurozone Stocks

Tuesday’s German factory orders release sent a disappointing signal about industrial demand. Although the pace of decline eased from -10.9% m/m to -0.4% m/m in April, it fell below expectations of a 2.8% m/m increase. Both capital and consumer goods orders…

3 years ago

Essentials

Inflation Keeps The RBA Hawkish For Longer

The Reserve Bank of Australia surprised markets with a 25 basis point rate hike on Tuesday, bringing the Cash Rate up to 4.1%. This marks the second consecutive rate increase following a pause in April. The post-meeting statement stressed that at 7%,…

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

Swedish Economic Warning Signs

The Swedish manufacturing PMI declined to 40.6 in May, the lowest level since June 2020. This deterioration in Sweden’s manufacturing activity not only reflects the domestic economy, but it also highlights weaknesses in the global industrial cycle. Sweden…

3 years ago

Essentials

Resetting The Expectations Bar

According to BCA Research’s US Investment Strategy service, the near-term consensus outlook has grudgingly improved but is still excessively bearish. Economic surprises will continue to boost stocks until a 2023 recession is fully priced out. On May 4th, the…

3 years ago

Essentials

US Services ISM Disappoints

The ISM PMI sent a disappointing signal about US service sector activity in May. The headline index unexpectedly fell from 51.9 to 50.3 – the weakest level since December and surprising expectations of an improvement to 52.4. The details of the release were…

3 years ago

Essentials

The Euro Is Here To Stay

According to BCA Research’s European Investment Strategy service, although the ECB faces important challenges in the coming year, its success in maintaining price stability and in preserving the euro’s integrity are bullish for the euro because it makes…

3 years ago

CoreMacroFICC

Happy 25th Birthday, ECB

Special Report

It is easy to claim that the ECB is failing in light of today’s elevated inflation readings. Yet, the reality is more subtle and the ECB’s performance lays the ground for stronger growth ahead.

3 years ago

Equities

Style Chart Pack

The S&P 500 performance was flat in May if not for the strong performance of a small cohort of mega-caps, aided by exposure to AI. Earnings and sales growth are contracting but analysts expect a rebound into a yearend, which is already priced in. Yet, inflation is still elevated, and the job market is stubbornly tight – rates will stay much higher for longer, eventually ending the party. Until then, the lopsided equity rally may continue.

3 years ago

Economy

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