Recession-Hard/Soft Landing
Mr. X and his daughter, Ms. X, are long-time BCA clients who visit our office toward the end of each year to discuss the economic and financial market outlook for the year ahead. This report is an edited transcript of our recent conversation. Mr. X: I have…
Highlights Portfolio Strategy Depressed technicals, compelling valuations, macro tailwinds, improving operating fundamentals and the messages from our relative profit growth models and relative Cyclical Macro Indicators all signal that the time is ripe…
Highlights Maintaining an adequate level of aggregate demand has proven to be one of the biggest macroeconomic challenges of the modern era. Yet, in principle, it should not be difficult to increase demand. After all, people like to consume. If…
Highlights The investors we met last week were ready to hear some good news: The constructive story we told across three days of client meetings is more sanguine than the consensus view, but clients were open to considering it. Global economic weakness…
Highlights The manufacturing slowdown, on its own, is unlikely to tip the economy into a recession. The sector accounts for a small share of U.S. output and employment, and will gain a tailwind from a pick-up in global growth. A larger and more stable…
Analysis on Turkey is available below. Highlights A dovish Fed or robust U.S. growth does not constitute sufficient conditions for a bull market in EM. China’s business and credit cycles are much more important factors for EM than those of the U.S. A…
Highlights We still don’t see a recession occurring in the next twelve months, … : Recessions only occur when monetary policy is restrictive. It’s easy now, and it will be a while before conditions push the Fed to execute the requisite series of rate…
Highlights European and global growth will rebound in the fourth quarter but the rebound will lack longevity. Bonds: Expect bond yields to edge modestly higher, especially for those yields that are deeply in negative territory. Underweight German bunds…
Highlights The fundamentals of the U.S. economy remain strong but investors’ skittishness has caused stocks to fluctuate with the ebb and flow of news headlines. With investor sentiment playing a leading role, we introduce a simple framework for tracking…
Highlights Portfolio Strategy Firming relative profit prospects, rising likelihood of an oil price spike and higher geopolitical risk premia, bombed out valuations and extremely oversold technicals all signal that an overweight stance is…