Financials have celebrated the modest upshift in the interest rate structure and hopes for a reversal of the regulatory framework that has been a structural noose on profitability, and risk premiums. These factors, along with our…
Highlights Portfolio Strategy Retail food stocks are deep into the buy zone. Deflating food costs augur well for profit margins in the coming quarters. Lift the financial sector to neutral, via the asset manager and investment bank…
Highlights Most narratives surrounding G7 bond yields, the U.S. dollar, Chinese credit/fiscal impulses, and the RMB exchange rate - which justified the EM rally from February's lows - have been overturned. To be consistent, this…
Regardless of who wins the U.S. election, the gaping mismatch between fundamentals and broad market valuations remains intact, but will be in jeopardy of re-converging should the Fed signal an intention to tighten monetary conditions…
Bank stocks have moved higher, following the sell-off in global bond markets and steepening in yield curves sparked initially by the Bank of Japan's curve targeting shift and a reversal of incremental easing expectations from the…
Highlights Portfolio Strategy Bank profits are unlikely to match those of the broad market if the Fed hikes interest rates and loan demand cools. Sell into strength. Gold shares are looking increasingly attractive, but we will…
Financial stocks have risen in sympathy with the back up in global bond yields, but that likely represents position squaring more so than a sustained shift into the sector. Financial profits will continue to be challenged by a downturn…
While the corporate sector has run up debt levels and is struggling to generate profit growth, consumers have rebuilt their savings and are enjoying the benefits of a positive wealth effect. The increase in real wage and salaries growth…