Economy
Eurozone industrial production grew by 1.5% m/m in August – double the expected rate of increase – following a 2.3% contraction in July. The production of capital goods and consumer goods led the August increase. Despite the improvement in industrial…
Extremely tight US labor market conditions – illustrated by the extremely narrow gap between labor supply and demand – have been putting upward pressure on wage growth. As such, this gap needs to widen in order for overall price pressures to ease. How…
Extremely accommodative policy settings globally during the pandemic – including injections by central banks – caused a surge in excess liquidity, leading to “too much money chasing too few goods.” Prices of commodities rose and led to higher global export…
Minutes from the Fed’s September 20-21 meeting underscore that FOMC members continue to believe that inflation risks outweigh overtightening risks. Specifically, “many participants emphasized that the cost of taking too little action to bring down inflation…
BCA Research’s Global Fixed Income Strategy service recommends investors go long a 3-month/30-year Gilt barbell versus selling a 5-year Gilt bullet, on a duration-matched basis. The UK gilt market has become a volatile focal point for global investors. An…
Stay defensive at least until the US midterm election is over. Gridlock is disinflationary in 2023 and hence marginally positive for US equities. But any relief rally will be short-lived as recession risks are very high.
Chinese credit growth largely beat expectations in September. New yuan loans increased by 2.47 trillion, nearly double the prior month’s 1.25 trillion and significantly above expectations of 1.8 trillion. Similarly, the total social financing – a broad…
The Sentix measure of Eurozone Investor Confidence sunk 6.5 points in October to -38.3, marking the lowest level since May 2020. Both the Current Climate and Expectations components of the index deteriorated with the latter falling to its lowest since…
We continue to anticipate that the Fed won’t pause its tightening cycle until Q1 or Q2 of 2023, and current labor market trends certainly give no indication that a Fed pause (or “pivot”) is imminent.
Sentiment toward stocks is depressed and European valuations have declined substantially. However, the earnings outlook remains poor. Which side will win?