Asset Allocation
Despite global bond yields having trended lower since April, bonds have only started outperforming equities since July in US dollar terms. We expect this outperformance to persist going forward. Sentiment has largely driven the equity market rally this…
China’s CPI and PPI both surprised to the downside in August. Consumer prices grew from 0.5% y/y to 0.6%, below the 0.7% anticipated. However, a 2.8% y/y surge in food prices (the fastest pace so far this year) overstates this headline figure. Core CPI…
Global semiconductor stocks have returned 50% YTD in USD terms, and a whopping 200% since their September 2022 lows. However, they may have peaked back in July. Our Emerging Market strategists highlight a significant bifurcation between the revenues of…
Crucial leading indicators of the global and European economies continue to deteriorate. How should investors position their European portfolios to benefit from these trends?
Many currencies have registered sizable gains against the US dollar over the last two months. Most notably, the yen has been one of the best G7 performers since the greenback began depreciating. It now trades at 143 against the US dollar, marking a 11% gain…
Both leading PMI measures painted a sluggish picture of China’s economic conditions in August. The NBS composite PMI suggested that overall activity barely expanded (50.1) and that the manufacturing sector’s contraction unexpectedly accelerated (49.4 to…
The Q2 2024 earnings season is drawing to a close with 93% of S&P 500 companies having reported results as we go to press. Nearly 80% (60%) of companies have topped earnings (sales) expectations in Q2, according to Factset. Excluding Materials and Real…
The risk-on soft-landing narrative dominated investors’ psyche last month and pro-cyclical assets topped the August return ranking. Asian currencies led the pack by a wide margin, while the dollar was the largest laggard. Markets pricing in an upcoming Fed…
The 2Y/10Y segment of the yield curve is flirting with un-inversion. Aggressive rate cut expectations have largely driven its steepening, with the 2-year Treasury yields falling nearly 100 bps over the past couple of months. Our colleagues at the Bank…
According to BCA Research’s European Investment Strategy service, an increase in borrowing costs will further weaken vulnerable corporate balance sheets. As suggested by their Corporate Health Monitors (CHMs), the health of High-Yield corporate balance sheets…