Equities
The risk-on soft-landing narrative dominated investors’ psyche last month and pro-cyclical assets topped the August return ranking. Asian currencies led the pack by a wide margin, while the dollar was the largest laggard. Markets pricing in an upcoming Fed…
According to BCA Research’s European Investment Strategy service, an increase in borrowing costs will further weaken vulnerable corporate balance sheets. As suggested by their Corporate Health Monitors (CHMs), the health of High-Yield corporate balance sheets…
Even after the Fed cuts rates, policy will remain restrictive for some time. Moreover, in history, stocks have tended to fall around the first rate cut. We remain cautious on the outlook for the economy and risk assets.
Our annual end-of-summer chartbook report traces the labor market deterioration that led us to downgrade equities at the beginning of August. It also highlights the soft-landing expectations that the credit and equity markets are discounting. We like the risk-reward profile of our newly defensive stance.
According to our Bank Credit Analyst service, an inflection point in the relative performance of US stocks is not likely to occur over the coming 6-12 months. A recession favors US equities in common currency terms barring substantially less global ex-US…
Last week, economists polled by Bloomberg revised their consensus 2024 US GDP forecasts upwards, from 2.3% to 2.5%. Government spending and private investment were both revised 0.3 ppts higher to 3.0% and 3.9%, respectively, while consumption growth forecasts…
The market is currently expecting the Fed to cut rates by 100 bps over the course of 2024 and by another 120 bps throughout the first eight months of 2025. However, our Global Investment strategists expect the extent of 2024 rate cuts to undershoot…
Chinese industrial profits rose by 4.1% y/y (3.6% YTD y/y) in July, from 3.6% (3.5%) in June. Upstream mining industries’ profits contracted 9.5% from January to July 2024, whereas downstream manufacturing sectors’ profits rose 5.0%. The NBS reported that…
The Conference Board’s Consumer Confidence measure surprised to the upside in August, rising from 100.3 to 103.3, above expectations of 100.7. Consumers’ assessment of present economic conditions climbed 0.8 points to 134.4, while their expectations about the…
Brazilian equities have largely underperformed their EM peers in USD terms since the beginning of the year. Rising public debt and inflation are the two main forces weighing on the Brazilian bourse. Our Emerging Market strategists expect public debt-to-GDP…