Economic Growth
Recent data suggest that the US housing market is resilient. In particular, a strong rebound in homebuilder sentiment is sending a positive signal. The NAHB Housing Market Index jumped from 37 to 44 in January – handily beating expectations of 39 on the back…
The Fed’s latest Beige Book delivered a lukewarm message on the US economy. Growth, employment, and prices were all relatively stable since the previous release in late-November. Eight districts reported little or no change in activity, three districts…
According to BCA Research’s Emerging Markets Strategy service, Indian stocks, which benefitted immensely from foreign portfolio inflows and are now very expensive, remain vulnerable to any global risk-off sentiment. The new year marked a new high for…
The US retail sales release delivered a positive signal about the US economy in December. The 0.6% m/m increase in overall retail sales beat expectations of a more muted acceleration from 0.3% m/m to 0.4% m/m. Importantly, the improvement was broad-based with…
Chinese data continues to send a pessimistic signal for domestic risk assets and China plays. Although at 5.2% in Q4, GDP growth stands above the official target, it underwhelmed anticipations of 5.3%. Moreover, other data releases reveal that the economy…
The performance of the Industrials sector tends to lag the business cycle, as companies invest in capex on the heels of economic expansion. But demand is not entirely cyclical, as the need to replace obsolete or aging equipment or machines is relatively…
Results of the ZEW survey sent a slightly positive signal on German investor sentiment. The economic expectations indicator rose to an 11-month high in January – beating consensus estimates of a decline. This increased optimism about the outlook reflects an…
The New York Fed’s Empire State Survey delivered a somber signal about US manufacturing conditions. The headline general business conditions index plunged from -14.5 to -43.7 in December, disappointing expectations of an improvement to -5.0. This move…
The US manufacturing renaissance, spurred on by reshoring, automation, and government spending, is running its course but progress has slowed on the back of tight monetary conditions and the manufacturing recession. The deceleration of these positive trends weighs on the outlook for the Capital Goods industry group, impeding its performance over the short term. However, we reiterate that positive long-term trends for the industry remain intact. We downgrade Capital Goods to a tactical underweight. It remains a strategic overweight.
China’s central bank unexpectedly held the medium-term policy rate unchanged at 2.5% on Monday, surprising expectations of a 10 basis point cut. Given that deflationary forces dominate China’s economy, the decision to stand pat underscores that policymakers…