BCA Indicators/Model
We update our corporate default rate model and consider the implications for corporate bond spreads.
Despite the disastrous performance by former President Trump in the debate with Vice President Kamala Harris, there are still paths for him to come back to power. The economy and global instability could flare up anytime between now and election day, while quirks in the Electoral College ensure that the election will be close. The race is still competitive and policy uncertainty and volatility will be elevated.
In this Special Report, we analyze the behavior of economic data leading up to US recessions and discuss some common patterns.
Democrats will not win a full sweep and implement drastic new tax hikes. However, our quant model still favors them to win the White House and just upgraded their odds. While we expect equity volatility around the election, investors do not need to worry about corporate tax hikes.
Investors hope that the ECB rate cuts priced into the curve will be sufficient to achieve a soft landing in Europe. History argues against this view, but will this time be different?
