Recession-Hard/Soft Landing
A benign disinflation will support equities over the next few quarters. Stocks will fall next year as a recession begins when investors least expect it.
Eurozone households are becoming less concerned about the near-term outlook for inflation. The results of the latest ECB Consumer Expectations survey show a significant drop in median 12-month inflation expectations from 5.0% in March to 4.1% in April – the…
What’s going on? The market-weighted stock market is up. But the equally-weighted stock market is not up. Neither is credit. Neither are industrial metal prices. Neither is the oil price, despite two waves of OPEC output cuts. We explain the dichotomy. Plus: European basic resources stocks can rebound, but Netherlands is likely to reverse.
The Swedish manufacturing PMI declined to 40.6 in May, the lowest level since June 2020. This deterioration in Sweden’s manufacturing activity not only reflects the domestic economy, but it also highlights weaknesses in the global industrial cycle. Sweden…
On the surface, Friday’s nonfarm payrolls report delivered a strong positive surprise. Establishment survey results reveal that employment increased by 339 thousand in May – above both the upwardly revised 294 thousand gain in April as well as consensus…
In our May In Review Insight, we showed that last month, UK stocks posted the lowest z-score among all major global equity markets, underperforming their Eurozone peers. What explains this relative weakness? The chart above reveals that the performance of…
US stocks have outperformed their global peers on a year-to-date basis. The MSCI US index’s 7.5% gain since January 18 eclipses the ACW index’s 3.1% increase. This trend has recently become even more pronounced: while the US index is up 1.5% since the end of…
BCA Research’s Global Asset Allocation service continues to recommend an overweight on government bonds, neutral on cash, and underweight on equities and credit. Market technicals do not suggest this is a robust broad-based equity rally. The US stock…
The Fed’s Beige Book is signaling that the US economy is losing steam following an improvement in momentum earlier this year. The release revealed that future growth expectations deteriorated. In particular, manufacturing activity was weak across most of the…
Over the past month, market participants have shifted their expectations for the path of the Fed funds rate. At the start of May, expectations were for the Fed to cut rates below current levels to just above 4.5% by the end of the year. Participants now…