Business Cycles
Japanese exports in JPY increased by 11.9% y/y in January, up from a 9.7% y/y increase in December and surpassing expectations of 9.5% y/y. A 29.2% y/y jump in exports to China led the overall surge. Trade data from Asian export-oriented economies are…
The minutes of the January FOMC meeting underscore that policymakers are adopting a cautious approach in timing the pivot to policy easing. Although Fed officials acknowledged that inflation and employment risks are “moving into better balance,” and that…
According to BCA Research’s Geopolitical Strategy service, European political risk is turning up again. Increased European political risk is not because of the European parliamentary elections, which will see right-wing populist parties perform well but…
The US Conference Board’s Leading Economic Index (LEI) fell by 0.4% m/m in January, following a 0.1% m/m drop in December – disappointing expectations of a milder decline. This marks the 23rd consecutive monthly decrease and has pushed down the index to its…
Chinese policymakers surprised on Tuesday with greater-than-anticipated easing for the troubled property market. Although the 1-year loan prime rate (LPR) – the benchmark for most household and corporate loans – was kept unchanged at 3.45%, the 5-year LPR –…
US Treasuries have been selling off over the past two months as investors downgrade the odds of an imminent start to the Fed’s easing cycle. Naturally, a question facing investors is whether current levels constitute a good opportunity to increase duration…
The Health Care sector is among the best performing US equity sectors so far this year. Its 6.2% year-to-date price gain exceeds the S&P 500’s 4.3% increase and is second only to Communication Services. This marks a shift in dynamics from the earlier part…
Reported earnings for Q4-2023 were rather underwhelming and prone to issues that we have identified over the past few months: Growth is concentrated in just a few sectors and companies, while the profitability of a broad swath of the equity market is under pressure from disinflation and sticky wages. Consumers are still spending, but less enthusiastically than before, while a switch from spending on services to spending on goods is in its very early innings. Downgrade Consumer Staples to neutral.
The Global Manufacturing PMI clocked in at 50 in January – exactly on the boom-bust line. The index has been on a general uptrend since mid-2023 with the January figure marking the first non-contractionary reading since August 2022. The headline index…
According to BCA Research’s Global Investment Strategy service, although the next recession is likely to be mild-to-moderate, the ensuing financial avalanche will be more severe. Valuations are highly stretched and hopes that today’s tech leaders will…