We turned more cautious on banks in January, but in hindsight, could have become outright bearish. Banks are headed for a triple whammy of profit trouble. Loan growth is set to cool, the credit cycle has shifted from tailwind to…
Like the economy, banks show no major imbalances. But the "glide path" for credit is slower than in previous cycles.
Sell the bounce in banks, which face a triple whammy of earnings threats. This will reduce our financials sector allocation to underweight, making room for last week's energy upgrade.
Last month, we highlighted that the S&P consumer finance index had far undershot bullish readings from our macro indicators, reflecting company specific issues. As the latter fade into the rearview mirror, relative performance…
Treasuries appear overbought in the near-term, especially given evidence of a rebound in global manufacturing, but we would need to see evidence of a sustained re-synchronization of global growth before advocating a shift to below…
The previous Insight showed that capital formation has hit a brick wall as a consequence of ebbing risk tolerance. That is robbing the corporate sector of much needed growth capital, and will reinforce the need for retrenchment. As a…
Last year's sharp tightening in financial conditions is wreaking havoc on the S&P capital markets index. Capital formation has dried up, and the persistent erosion in economic expectations, as measured by the total return ratio…