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Equities

Lower Eurozone Inflation Expectations Foreshadow Slower Wage Growth
Eurozone households are becoming less concerned about the near-term outlook for inflation. The results of the latest ECB Consumer Expectations survey show a significant drop in median 12-month inflation expectations from 5.0% in March to 4.1% in April – the…
Daily Insights
Potential Drivers Of An Earnings Rebound
According to BCA Research’s US Equity Strategy service, the earnings contraction is far from over. However, rising productivity, falling costs, or a new restocking cycle could help. Earnings and sales growth beat analyst expectations in Q1-23, yet in real…
Daily Insights
Markets Are Failing The Rorschach Test

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.

Counterpoint by Dhaval Joshi
Falling German Factory Orders: Bad News For Eurozone Stocks
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…
Daily Insights
Will EM Stocks Continue Underperforming?
After a brief period of outperformance in late-2022/early-2023, Emerging Market stocks have been underperforming their Developed Market counterparts since January 19. While the DM equity benchmark is up 6.9% over this period, the EM index has lost 4.0% in USD…
Daily Insights
Swedish Economic Warning Signs
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…
Daily Insights
Resetting The Expectations Bar
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,…
Daily Insights
US Services ISM Disappoints
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…
Daily Insights
Style Chart Pack

The S&P 500 performance was flat in May if not for the strong performance of a small cohort of mega-caps, aided by exposure to AI. Earnings and sales growth are contracting but analysts expect a rebound into a yearend, which is already priced in. Yet, inflation is still elevated, and the job market is stubbornly tight – rates will stay much higher for longer, eventually ending the party. Until then, the lopsided equity rally may continue.

US Equity Strategy by Irene Tunkel
Client Q&A

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.

US Investment Strategy by Doug Peta

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