Developed Countries
As expected, Euro Area retail sales continued to decline on both a month-over-month and a year-over-year basis in September. The 0.3% m/m drop is slightly below expectations of -0.2% m/m while the 2.9% y/y decline is not as bad as consensus estimates of -3.1%…
The US disinflationary trend remains intact. The core PCE deflator continued its downtrend in September, falling to 3.7% y/y from a peak of 5.6% in February 2022. Alternative measures of underlying price pressures such as the trimmed mean and median PCE…
US small-cap stocks have underperformed significantly this year. While the S&P 500 price index is up 14.0% year-to-date, the S&P 600 has lost 2.5%. However, this underperformance has not been a straight line down. Small caps benefited from a…
A Growing Monetary Policy Divergence Between Australia & Canada
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Following the October US jobs data, the ‘Joshi rule’ real-time US recession indicator increased from 0.11 to 0.15, meaning that it is fast approaching its event horizon of 0.20. We go through the investment implications. We also highlight a new long-term recommendation. Plus, the Norwegian krone is close to a potential rebound.
The Reserve Bank of Australia lifted the cash rate by 25 bps to a 12-year high of 4.35% on Tuesday, in line with consensus expectations. Governor Michele Bullock's post meeting statement underscored that although inflation is moderating, it remains too high…
The Global Composite PMI slid to 9-month low in October, sending a pessimistic signal about economic conditions around the world. The 0.5-point decline pushed the index down to 50.0 – right on the boom-bust line indicating that global activity stagnated last…
The Magnificent Seven constitute 26.7% of the S&P 500 and are the cohort responsible for the majority of S&P 500 returns this year. Fundamentals, and, specifically, the profitability of the group are behind the strong performance. If we compare the…
According to BCA Research's US Bond Strategy service, the current spate of MBS underperformance has created a lot of value in the sector. Mortgage-Backed Securities underperformed the duration-equivalent Treasury index by 64 basis points in October,…
The Vicious Troika remains a long-term threat, but over the short term, rates will likely have another leg down on growth concerns, offering support to equities, which are now fairly valued and are no longer overbought. Longer-term outlook remains negative. The Magnificent Seven will likely lead a tactical rebound. Overweight Growth vs Value and FSemis.