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Developed Countries

The Mystery Of The Missing Workers, Finally Solved

The pandemic gave older Americans and Brits a massive carrot and stick to retire early. The carrot being a surge in wealth, the stick being a risk to health. In other major economies, the carrots and sticks were smaller or non-existent. Hence, the shortage of older workers, and the resulting wage inflation, is a specific US and UK problem. We go through the important economic and investment implications for 2023.

Counterpoint by Dhaval Joshi
BoC: Upcoming Pause?
As expected, the Bank of Canada lifted the overnight interest rate target by 50bps to 4.25% at its Wednesday meeting. The post-meeting statement was less hawkish than the October version. In particular, although it mentioned that “inflation is still too…
Daily Insights
Sentix Signals Euro Area Manufacturing Rebound
The December Sentix Economic Index sent a positive signal about investor morale. The overall index for the Eurozone jumped from -30.9 to -21 – beating expectations of a more muted improvement to -27.5. Both the current situation and expectations components of…
Daily Insights
2023 Key Views: Gridlock At Home, Crisis Abroad

Investors should maintain a conservative and defensive strategy until recession risks are clearly reduced.

US Political Strategy by Yushu Ma, Matt Gertken, Jesse Anak Kuri, Guy Russell
Exports To US Drive Canada’s Trade Surplus
Canada’s exports and imports grew by 1.5% m/m and 0.6% m/m respectively in October, causing the trade surplus to widen to a larger-than-expected CAD 1.21 bn from a downwardly revised CAD 607 mn in September. Nearly three quarters of Canada’s exports go to…
Daily Insights
RBA Delivers Its Eighth Consecutive Rate Hike
As expected, the Reserve Bank of Australia lifted the Cash Rate by 25bps to a 10-year high of 3.1% on Tuesday – the third consecutive quarter-point increase after it unexpectedly slowed the pace of hikes in October. Governor Philip Lowe’s post-meeting…
Daily Insights
A Bear Market Bounce?
The S&P 500 has climbed 9.7% since mid-October, reducing the magnitude of the index’s decline since its January 3 peak to 18.2%. The question facing investors is whether the recent gains represent a bear market bounce that will ultimately give way to…
Daily Insights
A Negative Outlook For US Credit Spreads
BCA Research’s US Bond Strategy service recommends that investors enter 2023 with close to benchmark portfolio duration and with an underweight allocation to spread product versus Treasuries. While 2022 was a year of rapid Fed tightening, 2023 will be one…
Daily Insights
Sticking The Soft(ish) Landing

This week we present our Portfolio Allocation Summary for December 2022.

US Bond Strategy by Ryan Swift, Robert Timper
2023 Key Views: The Darkest Hour Before Dawn

2023 will be another challenging year for the US equity market, characterized by the Fed’s battle with inflation, slowing economic growth, and earnings contraction. The S&P 500 is likely to reach new lows in the first half of the year falling as much as 20-25%, only to rebound sharply in the second half, once all the bad news is priced in.

US Equity Strategy by Irene Tunkel

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