Developed Countries
On the surface, the Eurozone Sentix sent a positive signal about investor confidence. The headline index rose from -11.1 to -8.7, beating expectations of a more muted improvement to -10.1. However, a five-point rise in the Current Climate series – which…
Results from the US NFIB survey reveal that small businesses grew slightly more pessimistic in March with the Optimism index relapsing to 90.1 from 90.9. Importantly, small business owners face greater difficulty accessing credit. The net share of…
Euro Area stocks have gained 41.4% in USD terms since their late-September bottom. In the process, they have outperformed their US counterparts by 29%. After a brief period of weakness during the early-March bank turmoil, Eurozone equities are once again…
According to BCA Research’s US Equity Strategy service, the second half of the year will be challenging for equities There are many reasons that make the team wary of the durability of the rally, among which: Economic growth will continue to slow: …
Several signs have emerged that the “bad news is good news” rally has run its course. Despite deteriorating economic data, the Fed is expected to maintain its “higher for longer” stance, disappointing the market. A rate cut is likely is only in case of a severe downturn, but that will not offer support to equities, until earnings growth bottoms. We recommend shifting a portfolio toward a defensive stance, and away from cyclicals at this juncture. We downgrade Auto to an underweight, and Capital Goods and Energy Equipment and Services to an equal weight.
Friday’s US jobs report came in broadly in line with consensus estimates. Nonfarm payroll employment slowed from 326 thousand to 236 thousand in March. Increases in service sector and government employment offset a 7 thousand decline in the goods-producing…
At the end of last week, the 10-year Treasury yield fell to its lowest level in seven months, before climbing higher on Monday. The bank stress that emerged in early-March was the catalyst for this rally in Treasuries, causing investors to re-assess their Fed…
Poor Fundamentals Will Weigh On Tech Hardware & Equipment
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According to BCA Research’s European Investment Strategy service European core CPI inflation is near its peak. Even the recent surge in food inflation is near its end. European food inflation is elevated and is contributing an increasingly large share of…
European inflation has further downside and core CPI will soon begin to fall too. However, European growth will remain soggy in Q2. What does this environment mean for investors?