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Economy

Challenges Ahead For German Auto And Components Sector
The German auto and components sector is under stress. Year-to-date, the sector’s equity prices have declined by 3.5% relative to the broader German market, and multiple indicators suggest that further challenges lie ahead. One significant concern is the…
Daily Insights
Re-Estimating Net Interest Expense
BCA Research’s US Bond Strategy service concludes that recent BEA data are understating corporate net interest expense by a significant amount. Given the recent climb in interest rates, it would be reasonable to expect that corporate interest expense would…
Daily Insights
Are Higher Interest Rates Hurting Corporate Balance Sheets?

Top-down measures of nonfinancial corporate sector balance sheet health have been flattered in recent quarters by inaccurate data on interest expense. After correcting for the inaccurate data, we see that our best measures of corporate balance sheet health show a persistent steady deterioration.

US Bond Strategy by Ryan Swift
US Homebuilder Sentiment Sours In September
After a steady rebound in the first half of the year, the US NAHB Housing Market Index’s 5-point decline to 45 in September was a disappointment to consensus estimates of a 1-point decrease. It marks the second consecutive deterioration and brought down the…
Daily Insights
Inflation Is Still A Concern
Google searches for “inflation” by US users have been on a general downward trend over the past year. This is in line with developments in realized inflation as annual core CPI inflation peaked last September. Similarly, market- and survey-based measures of…
Daily Insights
Singapore’s NODX: No Imminent Global Manufacturing Rebound
Singapore’s non-oil domestic exports (NODX) sent a pessimistic signal about the global manufacturing cycle on Monday. The 20.1% y/y contraction in August is broadly in line with July’s 20.3% y/y drop and came in below consensus estimates of a 17.1% y/y…
Daily Insights
Some Upcoming Upside For Small Caps?
Monetary policy is difficult to calibrate: it is hard to get it just right. The Global Investment Strategy (GIS) service has been iterating that while the Fed could temporarily achieve a soft landing, there is much uncertainty surrounding the idea that the…
Daily Insights
Europe: Inflation Will Come Back
According to BCA Research’s European Investment Strategy service European inflation is likely to remain stubborn through the remainder of the decade, since the working-age population’s decline will keep the labor market tight. European rates have…
Daily Insights
Done, For Now

The ECB is done lifting interest rate for the cycle and its next move will be a cut next year. Yet, European rates will climb even higher in the second half of the decade.

European Investment Strategy by Mathieu Savary
Lags And Loops

While we are sympathetic to the view that the Fed could temporarily achieve a soft landing, we are skeptical that it could stick that landing for very long. Stocks could strengthen into year-end, with small caps potentially leading the charge. But the rally will fizzle out next year as the global economy begins to sink into recession.

Global Investment Strategy by Peter Berezin

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