アメリカ合衆国

China’s reopening faltered and now it is applying moderate stimulus. OPEC 2.0’s production discipline is getting results, with oil prices climbing. The Fed will not be able to deliver dovish surprises in Q4 2023. Investors should expect stock market and commodity volatility and prefer defensive positioning.

In this update to the two Special Reports on FX hedging of global equity portfolios with nine different home currencies, published in 2017, we show that BCA’s proprietary dynamic FX hedging strategies have consistently added value to global equity portfolios. We value quant models as an important input in our decision-making process, but we do not suggest any investor to slavishly follow them, because models cannot capture all the important fundamental changes, as demonstrated in the details of this report.

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.

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.