China’s reopening faltered and now it is applying moderate stimulus. OPEC 2.0’s production discipline is getting results, with oil prices climbing. The Fed will not be able to deliver dovish surprises in Q4 2023. Investors should…
The Chinese economy will not recover without significant “irrigation-style” stimulus. The latter is still unlikely for the time being. Dim economic fundamentals justify lower valuations of Chinese equities. Lingering deflationary…
The Euro Area’s industrial production figures for July sent a disappointing signal on Wednesday. The 1.1% m/m decline in output fell below expectations of a smaller 0.9% m/m decrease. On a year-over-year basis, IP…
The CRB Raw Industrials Price Index has been relatively stable over most of 2023. To the extent that the index contains non-tradable raw materials such as burlap, hide, rosin, and tallow, it is less influenced by speculative…
According to BCA Research’s China Investment Strategy service, lower valuation readings in Chinese equities are justified by fundamentals. In absolute terms, valuations of both A-shares and investable stocks are…
While Chinese stocks have low valuations and are oversold, their attractiveness is dampened by uncertainties in the magnitude of stimulus and the dismal outlook for corporate profits in the next six to nine months.
Recent Chinese economic data show some signs of stabilization. China’s credit expansion surprised to the upside in August. Aggregate social financing totaled CNY3.12 trillion – above expectations of CNY2.69…
Earlier this year, our Emerging Markets strategists highlighted that the divergence between Latin American and Emerging Asian currencies was unsustainable. While Latam currencies – including the COP, MXN, BRL, PEN, and CLP…
The Chinese yuan fell to its lowest in nearly 16 years vis-à-vis the US dollar on Thursday following the release of Chinese trade data. Although the pace of export contraction slowed from 14.5% to 8.8% y/y in August (and…
The geopolitical backdrop remains negative despite some marginally less negative news. China’s stimulus is not yet large or fast enough to prevent a market riot. Two of our preferred equity regions, ASEAN and Europe, are struggling…