HighlightsThe power shortage in China due to depleted coal inventories and low hydro availability will push copper and aluminum inventories lower, as refineries there – which account for roughly one-half of global capacity – are shut to…
Highlights Evergrande has not only crossed regulatory gridlines but also regulators’ bottom lines; the government will use the example of Evergrande to impose discipline on real estate developers. The policy response will likely…
Power shortages are the latest source of risk clouding the Chinese economic outlook. An intensification of electricity supply issues is forcing factories in several key manufacturing hubs to curtail production. To reduce…
According to BCA Research’s European Investment Strategy service, the tactical environment is dangerous for European cyclicals in general, and materials in particular. The fallout from Evergrande’s problem will extend to the…
Highlights The Evergrande crisis is not China’s Lehman moment. Nonetheless, Chinese construction activity will decelerate further in response to this shock. Global equities are frothy enough that a weaker-than-expected Chinese…
Highlights Evergrande is just a canary in the coalmine warning of the vulnerability of global real estate, which is now trading on its highest valuation ever. US house prices are now more extended versus rents than at the peak of the…
The performance of global risk assets improved somewhat on Tuesday following Monday’s tumble on the back of concerns about the potential implications of an Evergrande default. Nevertheless, risks remain elevated. A key…
Chinese residential building starts and sales have been contracting since April and July, respectively. Similarly, the level of aggregate building construction activity appears to be rolling over. The Evergrande debacle presents…
Highlights We cannot predict how China will manage Evergrande precisely but we have a high conviction that it will do whatever it takes to prevent contagion across the property sector. However, China’s stimulus tools are losing…
BCA Research's US Investment Strategy service does not expect the fall of an overextended Chinese property developer to push the US out of Goldilocks and into too-cold territory. Reports that Evergrande will fail to make…