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Economy

The Outlook For Capex Runs Through Consumers
Consumption accounts for two-thirds of the US economy, and our recession view relies heavily on the deteriorating outlook for US consumers. That said, dissecting US GDP into its components reveals that consumption tends to merely stabilize during…
Daily Insights
High-Yield Downgrades Foreshadow Broader Deterioration
Corporate and junk bonds are the fixed-income sectors that are most exposed to an economic downturn. We’ve highlighted that markets continue to price in a Goldilocks scenario, with spreads narrowing despite ongoing deterioration in the labor market. Spreads…
Daily Insights
Recession Is Still On The Horizon
According to BCA Research’s Global Asset Allocation service, the economy has been in the “Overheating” phase of the cycle for a while, with signs of slowing growth but also stubbornly high inflation. The most likely next phase is “Recession,” though the…
Daily Insights
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Mexican Elections: Macro And Market Repercussions

MORENA has once again swept the Mexican election: Claudia Sheinbaum will be president, with little to no constraint in Congress. All in all, Mexican politics will remain stable and overall supportive of markets. In the medium term, fiscal spending will return to conservatism and the constitutional reforms will lead to mixed fiscal and economic repercussions. In the long term, however, fiscal and institutional risks will rise. We advise investors to remain overweight Mexican risk assets relative to EM in cyclical and structural time horizons, but prepare for Mexican markets to sell off in absolute and relative terms in the next couple of months.

Geopolitical Strategy, Emerging Markets Strategy by Max Malakhveitchouk, Juan Egana
ISM Manufacturing PMI Contracts Faster In May
The ISM manufacturing PMI declined further in May, from 49.2 to 48.7, thus disappointing expectations of a slower pace of deterioration. Similar to dynamics observed with their Chinese counterparts (see Country Focus), both US manufacturing PMI measures…
Daily Insights
Why Are China's Manufacturing PMIs Diverging?
The Caixin Chinese manufacturing PMI reached a two-year high in May, expanding at a larger-than-expected rate from 51.4 to 51.7. The Caixin figure thus contrasts with the alternative NBS manufacturing PMI, which unexpectedly contracted in May. The Caixin…
Daily Insights
KOF Leading Indicator Disappoints
The Swiss KOF Barometer is a composite leading indicator of the Swiss economy. It surprised to the downside in May, coming in at 100.3 from 101.9, below expectation of an acceleration to 102.1. Switzerland’s economy is highly pro-cyclical and…
Daily Insights
Oil Demand Forecasts Raise The Risk Of Disappointments
According to BCA Research’s Commodity & Energy Strategy service, the oil demand forecasts from the IEA, EIA, and OPEC are too optimistic. The IEA, EIA, and OPEC all anticipate oil demand growth to slow this year following a robust post-pandemic…
Daily Insights
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Looking For Two Cuts This Year

Our Portfolio Allocation Summary for June 2024.

US Bond Strategy by Ryan Swift
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Is Europe Doomed To Underperform Forever?

European stocks have massively underperformed US ones since the GFC. Demographics and productivity say this trend will continue, but is that really so?

European Investment Strategy by Mathieu Savary

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