Geopolitics
The next six-to-nine months hold a crucial test of whether the equity market will ratify the soft landing and the Biden administration or not. If so, then markets will rally on policy continuity and likely gridlock. If not, then markets will struggle until the election is over and again in 2025-26.
Investors are wondering about the risk of a US government shutdown as the September 30 deadline draws near. Would a shutdown be a significant negative catalyst for the stock market? While there is a high risk of a government shutdown, there are more…
The Chinese government today announced that it is suspending the reporting of urban youth unemployment rate. This rate reached 21.3% in June after climbing since December. While there is an element of seasonality to the data – as youth unemployment rate…
On Monday, Asia Pacific equity markets closed in the red due to the news that China’s largest real estate developer, Country Garden, is suspending the trading of some of its bonds. This recent episode is a continuation of Chinese economic woes, which our…
Outperformance of Growth sectors most likely has run its course. It is time to shift Growth vs. Value allocation to neutral, downgrade Semis, and upgrade Energy to overweight.
On Wednesday, President Joe Biden announced that a new ban on some US investment into China’s quantum computing, advanced chips and artificial intelligence sectors will come into force next year. This latest escalation is consistent with our Geopolitical…
According to BCA Research’s Geopolitical Strategy service, investors should stay overweight low-beta assets. Geopolitical risk is likely to stay elevated in Asia Pacific in the coming months. Mainland China faces debt-deflation, poor governance, and a…
The global economy will not enjoy an “immaculate disinflation” but will suffer a very maculate one due to China’s growth slowdown and restrictive monetary policy in the developed world. Investors should stay overweight low-beta assets.
President Joe Biden’s approval rating trended down from a peak in February this year of 45.8% to the current level of 42.1%. Meanwhile his disapproval rating rose from a trough of 50.9% to its current 54.3%. The negative trend is worrisome for the Biden…
According to BCA Research’s Commodity & Energy Strategy and Geopolitical Strategy services, Russia is likely to cut oil production to pressure the West as a part of its war effort. This cut would push oil prices to above $90/bbl, in line with the team’s…