Developed Countries
Bond market volatility will spike again in the near term. The Fed is committed to an easing cycle yet the Trump administration’s signature fiscal policy action will stimulate the economy. Tariffs are supposed to keep the budget deficit contained but they are inflationary.
UK labor market deterioration reinforces our overweight on Gilts and dovish BoE policy trades. Payrolls fell by 109k in May, an acceleration from the 55k revised decline for April (originally reported as -33k), and job vacancies continued to slide. Slower…
Small business confidence improved in May, but hiring intentions fell and activity remains sluggish, reinforcing our cautious equity stance. The NFIB Small Business Optimism Index rose to 98.8, beating expectations. However, most of the improvement came from…
For now, measures of labor market utilization (like the unemployment rate) are only gradually weakening. But we know from history that these trends have a habit of quickly accelerating in advance of recession.
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Second Leg Risk Still in Play Despite TACO Trade Bounce
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Our Counterpoint Strategists see no signs of recession or market fragility but remain skeptical of US superstar stocks. Winners of past tech cycles rarely lead the next, making Web 2.0 firms unlikely beneficiaries of the AI-driven rally. BCA’s Counterpoint…
The May US jobs report reinforces our defensive stance as labor momentum is slowing even if not collapsing. Payrolls rose 139k, beating estimates, but decelerating from a downwardly revised 147k. Two-month revisions cut 95k jobs, again signaling that initial…
The May ISM Services PMI sent a stagflationary signal, reinforcing the case for defensive positioning. The headline index slipped into contraction at 49.9 from 51.6 in April, missing expectations. New orders collapsed to 46.4 from 52.3, while employment edged…
Canada’s Headwinds Push The BoC Toward Easing
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Our Portfolio Allocation Summary for June 2025.