Economy
Data released on Wednesday confirm that the US services sector remains a source of resilience in the US economy. Both the ISM Services Index as well as the final estimate of the alternative S&P Global Services PMI moved further above 50 in April, indicating…
As expected, the Fed delivered a 25bps rate hike on Wednesday. However, the FOMC statement and Chair Jay Powell’s post-meeting remarks signaled that this increase may mark the end of the tightening cycle. Notably, the sentence indicating that “the Committee…
Global small cap stocks have underperformed large caps by roughly 7% since the beginning of March, in response to concerns about the global banking system. Smaller firms are generally less able to access funding through capital markets, and thus are more…
According to BCA Research’s Geopolitical Strategy service, the late April meeting of China’s Politburo suggests that the Chinese government will maintain the accommodative macroeconomic policies outlined in March. Compared to last December’s Central Economic…
China’s reopening, combined with a slew of pro-consumption policy stimuli, will likely boost household consumption by 10% in nominal terms in 2023 from a year ago. Some of the hardest hit service sectors during the pandemic will experience a strong recovery. Within the A-share market, investors should overweight the consumer discretionary sector versus the Chinese CSI300 benchmark.
As the Fed meets today, we explain what it did wrong in 1970, 1974, and 1980 that prevented inflation from being exorcised, and the lessons for 2023-24. Plus, we identify a currency cross that could rebound in the next year.
The JOLTS survey for March showed a continued softening of the US labor market. Job openings fell from 9.97 million to 9.59 million – below expectations of a more muted decline to 9.74 million. While job openings remain historically elevated, the March update…
The Reserve Bank of Australia surprised markets with a 25bp rate hike at its Tuesday meeting, bringing the cash rate up to 3.85%. This decision follows a pause in April, which provided policymakers some time to assess the full effect of the 350 bps of…
Results of the ECB’s Bank Lending Survey revealed a substantial tightening in credit standards for loans to firms and loans to households for house purchase in Q1. Higher perceptions of risk and lower risk tolerance are behind the tighter conditions and banks…
First Republic (FRC) became the third large-cap bank to fold when regulators seized it over the weekend. Investors took the news in stride on Monday, but several large- and mid-cap regional banks sold off sharply on Tuesday. Our US Investment Strategy service…