Highlights Duration: The coronavirus is still weighing on yields and could push them down further in the near-term. However, the history of past viral outbreaks suggests that yields will move sharply higher once the daily number of new…
Highlights The coronavirus is a wild card that may have a significant impact on the global economy, … : The COVID-19 outbreak is unfolding in real time, half a world away, and its ultimate course is uncertain. For now, our China…
Overweight Investors tend to overreact to events such as virus epidemics, but we deem that such fears typically create trading opportunities, especially in the hardest-hit sectors. Similar to hotels (that we upgraded to…
Highlights Global equities have benefited from the fact that the number of new coronavirus (COVID-19) cases continues to drift lower. Falling bond yields have also supported stocks. Nevertheless, risks remain. Even if the outbreak…
Highlights The COVID-19-induced demand shock in China – and a stronger USD – will reduce growth in global crude oil consumption to just over 1mm b/d this year, vs. earlier expectations of ~ 1.4mm b/d. Significant fiscal and…
Highlights Analyses on Asian semis, Argentina and Russia are available on pages 7, 12 and 14, respectively. The most likely trajectory for Chinese growth will be as follows: the initial plunge in business activity will be…
Highlights Chinese policymakers will deliver more growth-supporting measures in the coming months, but Chinese government bond yields have already priced in a much weaker economic slowdown and a more aggressive policy response. While…
Highlights Duration: Bond yields will stay low until the daily number of new COVID-19 cases falls to zero, at which point a sell-off is likely. We therefore recommend maintaining below-benchmark portfolio duration on a 6-12 month…
Highlights Portfolio Strategy Most of the macro and operating indicators we track are sending conflicting messages on the anticipated direction in the cyclical/defensive ratio. Stay on the sidelines on cyclicals versus defensives.…
Highlights Why did S&P 500 profit margins fall in 2019?: Compensation gains, trade tensions and spotty growth were the most likely culprits, though the absence of standardized disclosure hinders full attribution. Was it a one-off…