United States
There is a 50:50 chance of experiencing a major deflationary shock in the next two years, and an even greater likelihood on a longer timeframe. The good news is that several assets provide a good insurance against this risk, and that this insurance is now cheap. Plus we highlight a compelling commodity pair-trade.
Results of the US NFIB survey show small business sentiment dipped to a decade low in April. To the extent that small businesses are more exposed to domestic economic dynamics, the survey provides a good update on economic conditions in the US. On this…
Small is out of investors’ favor yet again and is down 13% off its February 3rd peak. The S&P 600 is now unusually cheap and trades 13x forward earnings, a 25% discount to the S&P 500. According to the BCA Technical indicator, Small is also oversold. …
According to BCA Research’s US Investment Strategy service, the immediate emergence of a second wave of banking system stresses poses a new threat to their constructive near-term economic and market views and will have to be monitored carefully. The team…
The US Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) shows that US commercial banks continue to tighten lending standards across nearly all business and household loan categories. Moreover, demand is weakening for commercial & industrial…
Treasury Secretary Janet Yellen warned of a “constitutional crisis” if Congress failed to raise the national debt limit and the United States defaulted on bond payments. Yellen spoke out to urge Congress to come to an agreement just ahead of May 9 meetings…
Friday’s US jobs report came in stronger than anticipated. Nonfarm payroll employment rose by 253 thousand in April, meaningfully above expectations of a 185 thousand increase. Admittedly, the March figure was revised down significantly from 236 thousand to…
Investors are betting that the Fed has delivered its last rate hike of the cycle and will swiftly pivot to easing policy. According to the CME Fedwatch tool, Fed funds futures are pricing in a 38% chance of a 25bps rate cut at the July meeting. By…
The Fed’s Index of Common Inflation Expectations confirms that there is reduced pressure on the central bank to tighten monetary policy further. The quarterly release shows the index declined for the third consecutive time in Q1. The index is a…
BCA Research’s Global Investment Strategy service’s base case remains a 2024 recession but the risks around that view have increased in light of recent banking stresses. A recession that begins abruptly this year could end up being deeper than one that…