Business Cycles
Since the low of 27 October last year, MSCI US has rallied by 19.1% and this rally has been firmly driven by cyclical sectors. Performance-wise Information Technology (IT), Communication Services and Financials and Real Estate have been the top performing…
Results of regional Fed surveys suggest that the US manufacturing sector is starting the year on a weak footing. Monday’s report from the Dallas Fed– the last to release its results for January – showed the headline manufacturing activity index collapse from…
This week is set to be a busy one for the US market. On the policy front, there is the Wednesday FOMC meeting which will give insight into the Fed’s latest thinking regarding the timing of rate cuts. On the data front, there is the Friday Jobs report which…
China’s industrial profits registered their second consecutive annual contraction last year, falling by 2.3% in 2023. The full year contraction comes despite a surge in industrial profits near year-end. Profit growth came in at 16.8% y/y in December…
Is the rebound in European PMIs enough to boost the appeal of European risk assets?
A recent slew of macroeconomic data has reassured us that the runway to a recession is longer than many thought. However, that positive realization comes with two caveats. First, the Fed pivot is not imminent, and the magnitude of rate cuts may disappoint. Second, the recession has been delayed but not avoided. Further, geopolitical risk is elevated. We will overweight Tech on the next dip and upgrade Retail to an overweight.
With the latest PCE release confirming that the disinflation process is intact (see The Numbers), a key question facing investors is around the timing of the Fed’s pivot to rate cuts. Indeed, the US inflation surprise index has collapsed from its mid-2021…
Friday’s US Personal Income and Outlays report for December delivered a positive update on the US economy. On the growth side, the data confirm the signal from the Q4 GDP release that consumer spending continues to power the US economy. The robust 0.5%…
Over the past few months, falling inflation has provided a boost to real wages in the Euro Area which returned to growth in 2023Q3 after 9 consecutive quarters of decline. This dynamic in turn improved the purchasing power of households, boosting their morale…
According to BCA Research’s The Bank Credit Analyst service, there are two important flaws in the market’s “Goldilocks” narrative. First, investors are assuming inflation will fully return to target this year because core inflation ex-housing is already at…