United States
Maintain a long-duration stance as the Fed moves to wait-and-see while downside growth risks build. The Fed held rates at 3.5-3.75% following three consecutive rate cuts. It signaled no urgency to cut again with only Governors Miran and Waller dissenting in…
Our US and Geopolitical strategists view US social unrest and a government shutdown as having only fleeting market implications. Checks and balances in the US political system are underrated, with institutions, the economy, and financial markets acting as a…
Checks and balances in the US political system are underrated. Social unrest and government shutdown will have fleeting market implications.
Stay long duration as weakening consumption and labor-market perceptions point to further Fed cuts. The January Conference Board survey missed estimates, with the headline index dropping to 84.5 from 94.2. The decline was driven by a weaker assessment of both…
US manufacturing indicators point to stabilizing yet muted growth. US November manufacturing orders beat expectations. New orders for non-defense capital goods excluding aircraft rose 0.7% m/m, accelerating from a 0.3% increase in October, while shipments…
January flash PMIs point to better, though unspectacular, global growth momentum. Developed markets PMIs showed improvement in global growth momentum. PMIs have largely moved sideways through 2025, with manufacturing now recovering after trade uncertainty and…
Recent economic data have been reasonably firm. We will cut our 12-month US recession probability to 40% from 50% if the Supreme Court strikes down President Trump’s tariffs. This would take our scenario-weighted year-end 2026 price target for the S&P 500 to 6375 from 6200.
Maintain a modestly defensive stance as consumption fundamentals become increasingly fragile. US consumption in October and November was stronger than expected, but its support pillars have become more fragile. Real spending rose 0.3% m/m in both October and…
Our US Bond strategists expect long duration positions to outperform long credit risk in 2026. The Treasury term premium remains high despite declining rates volatility and tight credit spreads. The divergence between the term premium and interest rate…
The 10-year Treasury term premium is now competitive with Baa- and Ba-rated credit spreads. Even without term premium compression, duration carry trades could outperform credit carry trades in a low rate vol environment.