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Financial Markets

Is Bad News Now Good News For Chinese Equities Too?
September’s Chinese PMIs were uninspiring. The Caixin manufacturing PMI dipped into contraction territory (50.4 to 49.3) despite expectations it would modestly improve. The alternative NBS manufacturing PMI improved from 49.1 to 49.8, above expectations,…
Daily Insights
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Fourth Quarter 2024 Strategy Outlook: Soft Landing Or Quicksand?

After resisting the consensus narrative in 2022 that a US recession was imminent, and then predicting an immaculate disinflation for 2023, the Global Investment Strategy team has joined the dark side and is now expecting a recession to start in the US within the next six months. Accordingly, we recommend that investors underweight stocks and overweight government bonds.

Global Investment Strategy by Peter Berezin
Consumer Income And Spending Consistent With Broad Cooling
US nominal personal income growth decelerated to a 0.2% pace in August, from 0.3% in July, missing expectations that it would accelerate. Nominal personal spending also disappointed, growing at a slower 0.2% pace from 0.5%. In real terms, spending barely…
Daily Insights
Downtrend In Savings Rate Gets Revised Away
Annual BEA data revisions resulted in a significant upward revision in GDP growth since Q2 2020, led by stronger consumption growth and more robust real disposable income growth than previously believed. Revisions also show that the savings rate has been…
Daily Insights
Upgrade EM To Neutral In Global Equity Portfolios
We highlighted last week that while the Politburo policy announcements are unlikely to produce a meaningful business cycle recovery in China, they nevertheless administered a shot of adrenaline to investor sentiment. Chinese equities, China-plays and other…
Daily Insights
Is This The Big Bang Stimulus Markets Have Been Waiting For?
This week has not been short of developments on Chinese policy. After unleashing a monetary policy blitz, the authorities held an unscheduled Politburo meeting resulting in a pledge to take actions towards stabilizing the housing market and to support fiscal…
Daily Insights
Has OPEC+ Exhausted Its Policy Levers?
One commodity that has not reacted to the bullish demand-side news from the Politburo (see The Numbers) is crude oil. Brent shed over 2% on Thursday, in sharp contrast to Copper’s gains. Oil markets seem to be reacting to a bearish supply-side development…
Daily Insights
Recession Or Not, Spreads Have Little Room To Tighten
US investment grade and high yield spreads have tightened 22 and 75 bps since their August highs. Risk assets have cheered the outsized Fed rate cut as the narrative in markets aligns with the Fed’s conviction it can deliver a soft landing. Our US Bond…
Daily Insights
Introducing The Global Political Capital Index
BCA Research’s Geopolitical Strategy service introduced a Global Political Capital Index. Investors should favor countries with newly elected government, small government size, and ample room to cut policy rate. Ideally, they should also be in a stable…
Daily Insights
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Navigating The Storm: A Simple Framework For Narrowing Winners And Losers
Special Report

As we head into a more turbulent macroeconomic and geopolitical period, investors should favor countries with newly elected government, small government size, and ample room to cut policy rate. Ideally, they should also be in a stable region, and not so dependent on the US or China. Hence, we are introducing the Global Political Capital Index as a way to integrate these factors into a score that can help narrow down the countries with the best and worst abilities to deal with the incoming challenges.

Geopolitical Strategy by Jesse Anak Kuri

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