Real Estate

Highlights An examination of the three pillars of China's economy provides an unambiguous signal that a slowdown is underway. This would normally warrant, at most, a neutral allocation to Chinese stocks, but several factors argue against cutting exposure…

Highlights Despite recent softness in the data, Swedish growth will remain robust over the next 6-12 months, supported by loose monetary conditions and solid export demand. Inflation has climbed back to the Riksbank 2% target, and additional increases are…

Highlights BCA's call is that the robust labor market will boost wages and incomes, and insulate the consumer from rising energy costs and interest rates. Residential investment will add to GDP growth this year and support housing-related investments.…

Underweight Real estate stocks are behaving like fixed income proxied equities, given that, by construction, REITs are high dividend yielding. Thus, a tightening monetary backdrop serves as a noose around their necks (top panel). Not only is the Fed…

Highlights Portfolio Strategy Expensive valuations leave no room to maneuver in the S&P real estate index that has to contend with a higher interest rate backdrop and deteriorating cash flow growth fundamentals. Trim to underweight. In contrast,…

Markets have been uneasy recently; last month saw the Fed raise rates, combined with language indicating a steeper path for interest rate moves in the coming two years. As of writing, markets are currently assigning a nearly 75% probability of at least two…

Highlights In China, the central bank and commercial banks conducted outright monetization of real estate inventories, which caused the property markets' recovery post 2015. Despite destocking, aggregate property inventories remain excessive. Elevated…

Highlights Hong Kong's leverage burden is a corporate sector rather than a household sector problem. But this corporate sector debt is highly concentrated in the finance and real estate industries, meaning that investors should be legitimately concerned…

Highlights Key Portfolio Highlights Our portfolio positioning remains firmly behind cyclicals over defensives, driven principally by our key 2018 investment themes: synchronized global capex growth (Chart 1A) and higher interest rates on the back of a…

Highlights BCA expects consumer spending to remain supportive of above-trend economic growth in the U.S. in the next few quarters. Our view is that the 2018 outlook for both the U.S. economy and corporate profits remains constructive, but evidence is…