Overweight We remain constructive on the S&P banks index as all three key drivers of bank profits, namely loan growth, price of credit and credit quality, are simultaneously moving in the right direction. Leading indicators…
Highlights Portfolio Strategy The financials sector's fortunes are linked to the path of 10-year Treasury yields. BCA's view of a selloff in the bond market bodes well for this interest rate-sensitive sector. The S&P…
A recovery in asset values, employment and savings over the past eight years has taken household net worth steadily higher; it now exceeds pre-GFC levels. Historically, household net worth and the consumer finance index have moved hand-…
Highlights Revisiting the shadow banking system 10 years later. The September CPI data is unlikely to resolve the inflation debate at the Fed. How to invest in a late cycle environment. Wage Inflation was on the rise even before the…
Overweight - High-Conviction The S&P asset management and custody banks (AMCB) index has outperformed both the S&P 500 and the broad financials index since we lifted it to a high-conviction overweight in mid-February. The…
Highlights Expect Spain's strong growth to fade somewhat as its credit impulse appears to have peaked. The Catalan independence debate is an inconvenience but not a long term tail-risk. Expect Italy's growth to pick up as the…
Highlights The law of the vital few states that a small number of causes have a disproportionate impact on your overall investment performance. Get the bond yield direction right and your equity sector allocation, equity country…
Feature The Brazilian economy is finally improving following a devastating depression of about 3 years, where real GDP dropped by a whopping 7.4%. Does the current economic revival warrant a bullish stance on its financial markets?…
The latest FDIC Quarterly Banking Profile paints a rosy picture for bank earnings growth. A surge in net interest income drove the industry Q2 net interest margin (NIM) to its highest level in 4 years, and the return on assets to the…