Policy
The performance of financial markets continued to improve in June, with most of the major financial assets we track generating positive abnormal returns. The US equity rally – which had been narrowly concentrated among tech stocks for most of the year –…
Recession is on track to start around year-end. Stocks usually peak shortly before recession begins. So, position defensively but be prepared for a few more months of the rally.
This report reviews our key calls for major currencies, in light of recent data releases.
Our US Bond Strategy service responds to recent data releases which showed that real economic growth and the labor market are surprisingly resilient, while inflation pressures continued to decline. The 10-year Treasury yield broke above its top-end trading…
The June NBS PMI data revealed that growth conditions have deteriorated on the margin. The new orders and exports for overall manufacturing as well as for services have not improved and remain below 50. In addition, the import component of the…
In their just-published update of US housing market conditions, our colleagues at the BCA Bank Credit Analyst focus on whether May’s strong showing in new home starts and sales in May – up 21% and 12%, respectively – is a head fake or the beginning of a…
In a recently published report, our China Investment Strategy team revisited the issue of a liquidity trap in China. A liquidity trap is a condition that occurs when lower borrowing costs are unable to boost credit demand and economic growth, i.e., when low…
A look at how US bond yields responded to yesterday’s strong economic data and this morning’s soft inflation print.
We build a four-stage business cycle framework based on economic growth and capacity utilization, and then analyze historical returns for most major asset allocation decisions for each stage. Given that we are in the early recession stage (negative growth coupled and an overheated economy), our framework recommends a defensive positioning across all asset classes.
The preliminary inflation prints for June in the major euro area economies highlight a growing divergence in inflation outcomes. There was good news: headline CPI inflation in Italy fell to 6.7% in June from 8.0% in May, while Spanish headline inflation fell…