Banks

Highlights Our indicators suggest that investors should be especially cautious in the next month or two. April's Beige Book supports our view that higher inflation will lead to at least three more Fed rate hikes this year. However, the nation's trade policy is a concern for businesses. BCA's…

Our analysis is often focused on China, commodities prices and Asia's business cycle. The key points of these discussions are applicable to the majority of EM countries and their financial markets. Yet, there are some countries that are not exposed to China, commodities or global trade. India and…

Overweight (High Conviction) America's largest banks are set to kickstart earnings season at the end of this week/beginning of next week and, with a 25% improvement in EPS forecast by sell side analysts this year, expectations are high. We think deservedly so. Our high-conviction overweight…

Feature Japan's economic experience in the post bubble era is often described as a fate to avoid at all costs. We would like to turn this common notion on its head. Rather than something to avoid, Japan's post bubble experience is a fate that other major economies should actively try to…

Highlights The global economic mini-cycle is set to weaken while the euro is set to grind higher. Upgrade Telecoms to overweight. Also overweight Healthcare and Airlines. Underweight Banks, Basic Materials and Energy. Overweight France, Ireland, U.K., Switzerland and Denmark. Underweight…

The S&P banks index has been the best performer on our 2018 high-conviction call list and begs the question whether or not there is any "gas left in the tank". In this week's Special Report, we give our top 10 reasons why we still like banks, despite the recent run-up in relative share…

We boosted the financials sector heavyweight S&P banks index to overweight on May 1, 2017,1 and in late-November we also included it in our 2018 high-conviction overweight list. Since last May, relative performance has added considerable alpha to our portfolio, to the tune of 10 percentage…

Highlights Economy: The Italian economy is enjoying a solid, if unspectacular, cyclical upturn led by exports, but inflation pressures remain subdued. Banks: The health of Italian banks has improved drastically over the last year, with liquidity, solvency, and systemic risks fading for the…

Highlights Portfolio Strategy Synchronized global capex growth and higher interest rates are two key themes that will continue to dominate this year. Three high-conviction calls are levered to the former theme and two to the latter. A special situation completes our sextet. Reinstate the S…

Highlights The trajectory of EM bank profits and share prices will be critical to sustain the EM equity rally. Rising U.S. bond yields will push up EM local bond yields. This, along with poor quality of banks' earnings, will likely halt EM banks' stock rally. We reiterate our strategic equity…