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Developed Countries

Why European Inflation Will Slump Later This Year

The combination of collapsing energy inflation and cooling wage inflation means that euro area core inflation will slump later this year. We discuss the consequences.

Counterpoint by Dhaval Joshi
The RBA Is Nearing The End
As expected, the Reserve Bank of Australia raised its Cash Rate by 25 basis points to 3.60%, delivering a 10th consecutive rate hike. However, the central bank’s dovish signal about the monetary policy outlook led to a decline in Aussie government bond yields…
Daily Insights
The Fed Is Data Dependent
The US Treasury curve bear flattened sharply in response to Fed Chair Jay Powell’s testimony before the Senate banking committee on Tuesday. The 2-year yield’s 12 basis point jump and upward revision to futures markets’ expectations of the peak fed funds rate…
Daily Insights
Earnings Growth Expectation For Q1-23 And Beyond
Lower earnings expectations: Analyst earnings growth expectations have moderated since the summer, downshifting from a sugar-high 10% in July to the most recent target of 2% for the next twelve months.  This is a positive for equities as it indicates…
Daily Insights
A Period Of Indigestion For The Euro
BCA Research’s European Investment Strategy & Foreign Exchange Strategy services conclude that for the next one-to-three months, European data could continue to underwhelm US variables, which will weigh on the euro. The euro has been giving back recent…
Daily Insights
Sector Chart Pack: What Is Cheap?

The equity market is back to the 2019 level on an inflation-adjusted basis. However, it is still not cheap as it is not pricing in the possibility of a prolonged and deep earnings recession or a higher interest rates regime. Many areas of the market that appear cheap, are cheap for a reason. The only industries that are cheap because they are growing into their valuations are Energy and Airlines. We are upgrading Airlines to equal weight.

US Equity Strategy by Irene Tunkel
The Beginning Of A Relapse In European Soft-Data?
The March Sentix Economic Index sent a cautionary signal about investor morale. The overall index for the Eurozone declined from -8.0 to -11.1 – marking the first monthly decrease since the index bottomed at -38.3 in October and missing expectations of a…
Daily Insights
US Savings Rate Rises And Falls With Income Growth
According to BCA Research’s US Investment Strategy service excess pandemic savings are far more evenly spread than most investors realize, and all but the households at the bottom of the distribution are swimming in cash. The team has used the savings rate…
Daily Insights
Bonds Have Value Above 4%

This week we present our Portfolio Allocation Summary for March 2023.

US Bond Strategy by Ryan Swift
Too Hot, Too Cold, Both Or Neither?

A run of hot January data shook up financial markets, but we think they overreacted. We remain constructive on equities and the economy in the near term.

US Investment Strategy by Doug Peta

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