Financials
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 highest level in 10…
Highlights Dear Client, The Global Fixed Investment Strategy will not be publishing next week. Our regular publishing schedule will resume on September 12, 2017. Jackson Hole: Last week's Fed conference did not produce any signals on policy shifts from…
Highlights Your portfolio cash weighting should be at least in the middle of its range, until the observed volatility of risk assets rises meaningfully from its record low. Cyclically add long SEK/USD to long EUR/USD. Within a European equity portfolio…
Highlights Portfolio Strategy We reiterate our recent overweight calls in banks/financials and energy. Chemicals/materials and telecom services no longer deserve a below benchmark allocation. Pharma/health care and utilities are now in the underweight…
Overweight This year has proven a tough one for the consumer finance index, a result of the hangover following the Trump election ebullience. However, the path has been generally upward since the post-Q1 trough; we expect more of the same. The data is…
Feature Turkey's banking system has in recent years relied on enormous liquidity provisions by the central bank (Chart I-1) to sustain its ongoing credit boom, and hence economic growth. Since early this year, the authorities have doubled down: they have…
Underweight Late-2013 saw all the right economic conditions moving in favor of insurers: the economy was entering a soft patch, the yield curve was flattening and the U.S. dollar was gaining momentum. The insurance market began hardening and the…
This week's GDP report contained good news for domestic manufacturers; nonresidential fixed investment expanded at a 5.2% annualized rate in Q2, slower than the 7.2% expansion of Q1 but still well above the overall economy at 2.6%. The implication is that…
Highlights Return on Equity (ROE) has historically driven bank share performance, with the yield curve being the key driver for earnings growth. Since the 2008-2009 Global Financial Crisis (GFC), however, the recovery in ROE has been anemic, largely due…
Highlights To shed light on the dichotomies that have surfaced in China's money and credit variables, we have calculated a new credit-money. This new measure is currently corroborating a very downbeat outlook for Chinese growth and China-related plays.…