Insights

After this morning’s jobless claims number, we have now seen enough deterioration in our preferred labor market indicators to increase portfolio duration from “at benchmark” to “above benchmark”. ...

This report provides our framework for interpreting the messages from last week’s Third Plenum, and the potential implications for the economy and investors. ...

The S&P 600 and Russell 2000 have outperformed the S&P 500 by close to 10% since July 9. Small caps typically outperform in the early stages of economic expansions when growth is accelerating, demand-driven inflation is rising and lending standards are easing. Why are they rallying now that ...

“Cash on the sidelines” as a share of the US equity market cap has declined to a record low. This is true for investable funds of both households and investment firms. Hence, there is little firepower left to sustain the equity rally. ...

We calculate expected returns for several different US fixed income sectors with a focus on how municipal bonds stack up against the investment alternatives. ...

UK’s CPI growth stands right on the Bank of England’s (BoE) 2% target. However, services inflation remains sticky, growing at a constant 5.7% y/y in June. Moreover, the deceleration in wage growth remains insufficient to temper inflationary pressures in the services sector. Our European Investm...

Strong broad-based earnings growth could prolong a bull market but won’t stave off a recession, as it will emanate from struggling small businesses and less affluent consumers. Banks’ traditional business is under pressure, but capital markets activity is rebounding sharply. Recent rotation is profi...

Investors should focus on growth concerns rather than the “Trump trade.” Bond yields will fall in the short run due to cyclically disinflationary economic slowdown, rather than rise in anticipation of a Republican full sweep and inflationary policies, which are likely but not yet a done deal. ...

President Biden has announced his withdrawal from the presidential race. The news will no doubt come to dominate the news cycle in the upcoming week of July 22, which is unfortunate as it will drown out some important developments from the preceding week. ...

The PBoC lowered the 7-day reverse repo rate from 1.80% to 1.70% on Monday. The 5-year and 1-year loan prime rates declined by 10 basis points (bps) to 3.85% and 3.35%, respectively. However, this 10-bps cut is unlikely to have any meaningful stimulative effect on the overall economy. Not only ...