Developed Countries
The consensus soft-landing narrative is wrong. The US will fall into a recession in late 2024 or early 2025. We were tactically bullish on stocks most of last year, turned neutral earlier this year, and are going underweight today. We conservatively expect the S&P 500 to drop to 3750 during the coming recession.
Australia’s inflation for May was released on Tuesday. Annual headline CPI increased from 3.6% in April to 4%, outpacing expectations of 3.8%. Trimmed-mean inflation also increased from 4.1% to 4.4%. Individual components diverged. Food and non-alcoholic…
Our Global Investment Strategy team often highlights the job openings-to-unemployed ratio as a gauge of the labor market’s slack. This indicator climbed to over 2 job openings per unemployed person in 2022, as labor shortages plagued the US economy due to…
According to BCA Research’s European Investment Strategy service, the BoE will start cutting rates in September, but the pace of subsequent rate cuts will be modest until a recession engulfs Western economies in early 2025. The UK’s monetary policy remains…
According to the results of the latest German IFO survey, overall sentiment deteriorated slightly in June. The IFO Business Climate index declined from 89.3 in May to 88.6 in June, disappointing expectations of a modest amelioration to 89.6. The IFO…
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Canada’s headline inflation rate for May surprised to the upside on Tuesday. The 0.6% month-on-month print and 2.9% year-on-year increase came in above expectations of 0.3% m/m and 2.6% y/y, respectively. Both…
Historically, there has been a tight inverse relationship between the price of gold and US real rates. Elevated interest rates raise the opportunity cost of holding gold, making the yellow metal relatively less attractive for investors. Yet this…
BCA Research’s US Investment Strategy service remains tactically neutral with a defensive cyclical bias. The team is resisting the impulse to turn prematurely defensive ahead of the coming recession. Our colleagues believe that fleeing for the hills at…
Is the BoE making a mistake moving toward rate cuts before the end of the summer? What would such a move mean for UK asset prices?
Today’s report recaps last week’s webcast and elaborates on its themes, delving into the empirical evidence underpinning our conviction that asset allocators should underweight equities sparingly and fleetingly. We remain tactically neutral and cyclically bearish.