Developed Countries
What’s going on? The market-weighted stock market is up. But the equally-weighted stock market is not up. Neither is credit. Neither are industrial metal prices. Neither is the oil price, despite two waves of OPEC output cuts. We explain the dichotomy. Plus: European basic resources stocks can rebound, but Netherlands is likely to reverse.
Tuesday’s German factory orders release sent a disappointing signal about industrial demand. Although the pace of decline eased from -10.9% m/m to -0.4% m/m in April, it fell below expectations of a 2.8% m/m increase. Both capital and consumer goods orders…
The Reserve Bank of Australia surprised markets with a 25 basis point rate hike on Tuesday, bringing the Cash Rate up to 4.1%. This marks the second consecutive rate increase following a pause in April. The post-meeting statement stressed that at 7%,…
The Swedish manufacturing PMI declined to 40.6 in May, the lowest level since June 2020. This deterioration in Sweden’s manufacturing activity not only reflects the domestic economy, but it also highlights weaknesses in the global industrial cycle. Sweden…
According to BCA Research’s US Investment Strategy service, the near-term consensus outlook has grudgingly improved but is still excessively bearish. Economic surprises will continue to boost stocks until a 2023 recession is fully priced out. On May 4th,…
The ISM PMI sent a disappointing signal about US service sector activity in May. The headline index unexpectedly fell from 51.9 to 50.3 – the weakest level since December and surprising expectations of an improvement to 52.4. The details of the release were…
The Biden administration reached out to China to try to reduce tensions over the month of May, attracting interest from the investment community, though our Geopolitical Strategists believe the US and China cannot agree to a genuine strategic détente until…
According to BCA Research’s European Investment Strategy service, although the ECB faces important challenges in the coming year, its success in maintaining price stability and in preserving the euro’s integrity are bullish for the euro because it makes…
This week we present our Portfolio Allocation Summary for June 2023.
In response to client questions, we offer our view on the purported link between tech stocks and interest rates, the similarities between the S&L Crisis and the current banking turmoil and the near-term outlook for consensus economic expectations.