Developed Countries
For long-term investors, high-yield bonds are an attractive asset class. They behave like low-volatility equities: In the US, they have a 70-80% correlation with equities, but with a beta of only around one-third. The Sharpe ratio of US high-yield bonds over…
EM oil demand remains resilient and will continue to be propelled by global growth this year. Supply management by OPEC 2.0 and production discipline outside the coalition will be maintained, forcing inventories lower. Recent price weakness – largely reflecting political uncertainty – has pulled our 2023 Brent forecast down to $90/bbl (from $95/bbl); our 2024 forecast remains at $115/bbl.
US housing starts unexpectedly increased by 2.2% m/m in April – beating consensus estimates of a 1.4% m/m decline. The upside surprise follows Tuesday’s unanticipated 5-point jump in the NAHB homebuilder sentiment index to a 10-month high of 50. This marks…
The lift to European investor sentiment from the ebbing energy crisis is now in the rear-view mirror. The German ZEW Indicator of Economic Sentiment fell back below 0 in May to -10.7 from 4.1. The negative reading indicates that the share of pessimists…
According to BCA Research’s US Equity Strategy service, investors should stay underweight banks on a tactical investment horizon as the banking turmoil is far from over, and the industry’s profitability will be under pressure. The team has been underweight…
The US Retail Sales report painted a resilient picture of American consumers in April. Although the 0.4% m/m increase in overall retail sales fell below consensus estimates of a 0.8% m/m rise, the details of the report surprised to the upside. In particular,…
Recent Canadian data releases have raised concerns that the Bank of Canada may abandon the conditional pause it first telegraphed following its last rate increase on January 25 in favor of more policy tightening. Headline CPI inflation unexpectedly…
The S&P 500 Industrials index has gained 19% since its October 2022 lows and outperformed the S&P 500 gains of 15%. The sector has benefitted from American companies' efforts to "onshore" supply chains, but the deteriorating global industrial cycle…
The New York Fed’s Empire State Survey sent a pessimistic signal about US manufacturing conditions in May. The headline index plunged by 42.6 points to -31.8 – the largest monthly decline since April 2020 and below expectations of a milder decrease to -3.9.…
After a period of significant underperformance in 2022, US Growth stocks are regaining lost ground vis-à-vis Value. The S&P 500 Growth index has outperformed its Value counterpart by 7 percentage points since the start of the year. Notably, most of…