Business Cycles
Equity markets reacted negatively to the preliminary Q1 US GDP on Thursday, with the S&P 500 shedding 0.5%. Meanwhile, the 10-year Treasury yield rose 6 bps in response to the stronger-than-expected core PCE inflation print for Q1. Importantly,…
Results of Germany’s IFO business climate survey for April sent a positive message on Tuesday. The overall Business Climate Index increased from 87.9 to 89.4, beating expectations of 88.9. Assessments of both the current business situation (increased from…
The resilience of the US economy has led economists to consistently revise up their consensus real GDP growth forecast for 2024, which now stands at 2.4%, up from 0.6% in July 2023. Conversely, the 2024 consensus Eurozone growth estimate has been trending…
BCA Research’s Emerging Markets Strategy service concludes that among the CE3 currencies, the zloty and the koruna will be the relative winners, while the forint will likely be the worst performer of the three. That said, all three CE3 currencies will weaken…
Q1 earnings results of the largest US banks have demonstrated that the engine of recent growth in profitability, NII, has faltered as funding costs are rising fast. However, the resurgence in non-NII thanks to a revival in corporate activity has been a saving grace. Earnings growth appears to have bottomed, while valuations are attractive. To play up portfolio exposure to an upcoming surge in capital markets activity, and minimize exposure to declining profitability in traditional banking services, overweight Diversified Banks and Capital Markets, and underweight Regional Banks.
Export dynamics of small open economies are a bellwether for global growth. The latest Taiwanese and Korean export numbers are consistent with a revival in global trade. Taiwanese export orders grew by 1.2% y/y in March following a 10.4% y/y contraction in…
By the end of 2023, the “soft landing” scenario became the dominant narrative in financial markets. Following the regional banking scare in March of last year, market participants slowly came around to the view that the economy was entering a goldilocks…
According to BCA Research's European Investment Strategy service, European profit margins have downside because they are both elevated and procyclical. European net margins stand at 7.7% above their long-term average of 5%. Analyst expectations…
European profits margins are elevated. Will a mild recession be enough to bring them down?
BCA’s US Beige Book Monitor – an indicator we use to gauge changes in the language of the Fed’s Beige Book report and which historically tracks US GDP growth – has improved in April. Nevertheless — and despite March's hot retail sales and February's…