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Financial Markets

European Aerospace And Defense Stocks Are Hot
European aerospace and defense stocks are on the offense. Year-to-date, they are up 20% in absolute terms and 24% relative to their US counterparts, both in US dollar terms. The relative 12-month forward earnings suggest that this outperformance still has…
Daily Insights
Hit, Miss, Moving Forward

Momentum, high cash balances, FOMO, and expectations of soft landing drive the market higher. This rally may continue for a while, but macroeconomic headwinds are intensifying and will eventually derail the rally. It is too early to celebrate victory.

US Equity Strategy by Irene Tunkel
Turkey: Time To Go In?

Assuming yesterday’s policy rate hike is a sign that Turkey is finally veering towards orthodox economic policies; should investors rush in?

Emerging Markets Strategy by Rajeeb Pramanik
On The Resilience Of DM Energy Stocks
Oil Prices have gone through a dramatic boom bust cycle over the past 18 months. After rising almost 80% in the first quarter of 2022 following the war in Ukraine, Brent has fallen all the way back towards $70/bbl – where it was at the start of last year. …
Daily Insights
Bond Market Positioning Is Very Bullish
BCA Research’s US Bond Strategy service recommends investors maintain above-benchmark portfolio duration. However, the team is monitoring bond positioning as a potential catalyst that could push yields higher. JP Morgan’s Treasury Investor Sentiment Survey…
Daily Insights
Upgrading Japanese Stocks To Neutral
Japanese equities have been outperforming their global peers in recent months. Their 8.5% rally so far in Q2 exceeds the MSCI’s All Country World Index’s 5.6% gain over this period. Japan has not experienced the same inflationary overshoot plaguing most…
Daily Insights
Real Earnings Growth Across Various Inflation Regimes
High levels of inflation distort cross-period comparisons of both earnings and sales and mask real earnings growth rates. Last year is a case in point: While in nominal terms, earnings (including Energy) have been contracting for only two quarters, in real…
Daily Insights
What Could Push Bond Yields Higher From Here?

This week’s report examines three potential catalysts that could push Treasury yields meaningfully higher within the next few months. We also consider the rebuild of the Treasury’s cash holdings and its implications for the Fed’s balance sheet policy and financial markets.

US Bond Strategy by Ryan Swift
China: Flirting With Deflation

China is facing a risk of deflation. Marginal interest rate cuts and targeted stimulus will be insufficient to boost China’s growth given the current deflationary mindset and the danger is that the economy may be entering a liquidity trap. Deflation is bullish for government bonds, but negative for equity prices. Chinese share prices will continue to decline.

China Investment Strategy by Arthur Budaghyan
Is The S&P 500 Expensive, Enough?
The S&P 500 is up 23% since October 2022 and is now trading at a punchy trailing price-to-earnings (P/E) ratio of 21 times. These metrics have naturally amplified bear calls on the market. The bear camp which has been caught on the wrong side of this…
Daily Insights

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