Business Cycles
Strategists arguing for an end of the outperformance of US equities over international stocks have pointed to the lofty valuations of American stocks vis-à-vis their global counterparts. Moreover, they have highlighted that US tech companies, which have led…
Since the beginning of the year, our equally-weighted global cyclicals index has outperformed equally-weighted defensives by about 13%. As the chart above shows, this relative performance trend has been extremely positively correlated with US 10-year…
According to BCA Research’s Global Investment Strategy service, the structural bull case for carbon credits remains compelling. However, tactical investors should brace for prices to plateau or even correct over the next 12-to-24 months. The long-term…
If we look at global growth as an aircraft, the plane is experiencing failing engines and will lose more altitude in the coming months. Yet, neither Chinese authorities, nor the Fed or the ECB will be quick to come to the rescue as global growth downshifts. These dynamics herald a stronger US dollar and lower EM risk asset prices.
The US ISM delivered a positive signal about service sector activity in August. The headline index unexpectedly jumped by 1.8 points to a six-month high of 54.5, surprising expectations of a 0.2-point decline to 52.5. Importantly, the details of the report…
As expected, the Bank of Canada kept its policy rate unchanged at 5% on Wednesday. In particular, the central bank highlighted that domestic economic growth deteriorated. Indeed, last week’s GDP release showed the Canadian economy unexpectedly contracted…
According to BCA Research’s Counterpoint service, Goldilocks is just a fairy tale. In the near-term, this will be negative for stocks, neutral for bonds, and positive for the dollar. The Fed can win the war against inflation, but not without much higher…
The final PMIs for August delivered a pessimistic update on service sector conditions in the Euro Area and China. The Eurozone services index was unexpectedly revised down from 48.3 to 47.9 – indicating a more pronounced decline in service sector activity…
The AUD was the worst performing currency on Tuesday after the Reserve Bank of Australia kept its cash rate target unchanged at 4.1% for the third consecutive month. In particular, outgoing Governor Philip Lowe underscored that the uncertain economic outlook…
In a Tuesday morning television interview, Fed Governor Christopher Waller signaled that the Fed will not lift rates when it meets later this month. Specifically, Waller echoed language used by Chair Powell at the Jackson Hole conference by saying that recent…