Sectors
The decision by GeoMacro team on July 2 to short USDJPY and underweight equities has proven to be prescient. We still do not like the market setup from here on out. A recession would, obviously, be negative for risk assets. But even if investors avoid that scenario, the transition from cash- to leverage-driven growth is unlikely without a significant Fed rate-cutting cycle.
Lending standards continued to tighten for most loan categories in Q2, according to the Senior Loan Officer Survey (SLOOS). US banks reported tightening lending standards to businesses and all CRE categories. They kept standards mostly unchanged compared…
August’s selloff has featured a rotation out of Big Tech. The Nasdaq shed 8% across Thursday, Friday, and Monday, led by concentrated selling among several Mega caps. Nvidia, Tesla, Microsoft and Amazon shed 14%, 14%, 6% and 14% over the last three sessions,…
Historically, interest-rate sensitive sectors such as financials and real estate have tended to post the highest returns in the 3 months preceding the first Fed rate cut. Interestingly, industrials, typically a deep cyclical sector, have also tended to post…
Equity investors have been skittish about mid-cap banks ever since Silicon Valley Bank failed in March 2023. The S&P MidCap 400 Regional Banks Index remains 4% below its February 2023 high while the S&P 500 Diversified Banks Index, dominated by the…
Total consumer credit rose by USD 11.4 billion in May (to USD 5,065 billion outstanding) from a slightly upwardly revised USD 6.5 billion increase in April, surpassing expectations of a smaller increase. Notably, revolving credit (which includes credit cards)…
As Trump’s victory odds rise, the underperformance of European equities deepens. How negative would a global trade war be for European assets?
Today’s AI craze bears some resemblance to the late-1990s dotcom boom. We highlight three lessons from that period which are relevant today. Lesson #1: Productivity gains from the rollout of a new technology can take time to accrue. The dotcom…
Second quarter earnings season began for US public companies on Friday as JPMorgan (JPM), Citigroup (C) and Wells Fargo (WFC) reported their results before the open. (BAC, the other commercial bank SIFI (systemically important financial institution), reports…
We project US Multifamily cap rates to increase from 5.2% to 6.5%. While we find an unfavorable risk-adjusted return on the asset, especially relative to other opportunities in CRE, cap rates are moving closer to peak.