Consumer
According to BCA Research’s China Investment Strategy service, although the recovery in overall Chinese industrial profits will be subdued, there will be a silver lining among China’s consumer goods producers, autos and utilities. Corporate earnings in…
Canadian inflation slowed in May, slowing to 3.4% on a year-over-year basis from 4.4% in April. This matched market expectations, with the monthly increase of 0.4% (versus 0.7% in April), slightly lower than the 0.5% consensus forecast. The year-over-year…
Momentum, high cash balances, FOMO, and expectations of soft landing drive the market higher. This rally may continue for a while, but macroeconomic headwinds are intensifying and will eventually derail the rally. It is too early to celebrate victory.
The Conference Board’s US Leading Economic Indicator continues to warn about the economic outlook. The month-on-month rate of change and the six-month rate of change showed the index declining at a faster pace. Weaker consumer expectations for business…
Recent economic data reveal that Canadian household conditions remain resilient. Retail sales surprised to the upside in April. The 1.1% m/m increase follows two consecutive monthly declines and beat expectations of a 0.4% m/m rise. Similarly, the Bank of…
Industrial metals have been rallying in recent weeks. The London Metals Exchange Metals Index (LMEX) – a weighted index that captures the price movement of primary aluminum, zinc, nickel, lead, copper, and tin – has increased by 6.3% since late-May. Notably,…
According to BCA Research’s China Investment Strategy service, a sustainable recovery in Chinese property construction is unlikely. The deterioration in China’s property market indicators worsened in May. Home sales sank by 16% y/y and new home starts…
US Homebuilder confidence surprised to the upside on Monday, with the NAHB’s Housing Market Index jumping from 50 to 55 in June – beating expectations of 51. This marks the first time in 11 months that the index rises above the 50 level, signaling favorable…
According to BCA Research’s European Investment Strategy service Eurozone inflation likely to diminish further. First, policy is tight. The impact on leading economic variables is already visible, with M1 collapsing, credit demand plunging, credit…
Investors are still cautious and have significant cash that needs to be put to work. Trickle-down of it into the US equity market may extend the rally. Overly bearish futures positioning is also a strong contrarian indicator. Disinflation is good for real earnings growth, and imminent earnings rebound may add support for equities.