Economy
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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According to BCA Research’s Emerging Markets Strategy service, Indonesia's “window of opportunity” to transition to a lower real interest rate regime – without jeopardizing the currency stability – has closed. This opportunity had opened thanks to an…
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.
Increasing iron ore prices coupled with declining steel prices represent an unsustainable disparity. Iron ore prices will pivot downward in the next six months. A sizeable reduction in China’s steel production will likely occur, reducing global iron ore demand. Meanwhile, global iron ore supply will increase moderately.
Chinese trade data for October delivered a mixed message on Tuesday. On the one hand, the export contraction deepened to -6.4% y/y following -6.2% y/y in September and surprised expectations that it would moderate to -3.5% y/y. Yet on the other hand, import…
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,…