Developed Countries
Retail gasoline prices have surged 13% since the beginning of the year, boosted by resilient global demand and geopolitical tensions. A key question for investors pertains to the ability of US consumption to sustain further gasoline price increases.…
Flash estimates for several European PMIs were released Tuesday. The results for manufacturing activity were somewhat disappointing. The German manufacturing PMI increased from 41.9 to 42.2, but underperformed expectations of 42.7. France’s manufacturing…
Euro Area small caps typically outperform large caps whenever the trade weighted euro appreciates and underperform whenever it depreciates. The rationale is simple. Most European large cap companies are large multinationals that export their products outside…
According to BCA Research’s US Equity Strategy service, Q1 earnings results signaled that net interest income (NII) growth is set to decline in US banks. For nearly two years, America’s largest banks enjoyed a surge in NII thanks to rising rates and the…
Q1 earnings results of the largest US banks have demonstrated that the engine of recent growth in profitability, NII, has faltered as funding costs are rising fast. However, the resurgence in non-NII thanks to a revival in corporate activity has been a saving grace. Earnings growth appears to have bottomed, while valuations are attractive. To play up portfolio exposure to an upcoming surge in capital markets activity, and minimize exposure to declining profitability in traditional banking services, overweight Diversified Banks and Capital Markets, and underweight Regional Banks.
UK retail sales volumes were flat in March, a decrease from the 0.1% growth registered in February and disappointing expectations of a 0.3% m/m increase. The details were mixed, with automotive fuel and non-food stores sales volumes…
By the end of 2023, the “soft landing” scenario became the dominant narrative in financial markets. Following the regional banking scare in March of last year, market participants slowly came around to the view that the economy was entering a goldilocks…
Over the last weeks, US semiconductor stocks have plunged by over 17%. In a way, this correction should be expected. Semiconductor stocks had skyrocketed this year. Even after the recent pullback, semi stocks are still up over 20%…
According to BCA Research's European Investment Strategy service, European profit margins have downside because they are both elevated and procyclical. European net margins stand at 7.7% above their long-term average of 5%. Analyst expectations…
European profits margins are elevated. Will a mild recession be enough to bring them down?