Equities
- Congress will pass tax cuts by end of 2025 producing a fiscal thrust of about 0.9% of GDP in 2026.
- Trump will count on that stimulus as a basis for slapping tariffs on leading trade partners.
- China will retaliate against Trump and stimulate its domestic economy, while pursuing stronger trade ties with other countries. Europe will also retaliate.
- Geopolitical risk will shift from Ukraine-Russia to Israel-Iran, where the conflict will continue to escalate until a crisis point is reached within 2025.
The December Sentix Economic Index for the Euro Area missed expectations, declining to -17.5 vs. -12.8 in November. Both the current situation and expectations components declined. As the first sentiment indicator for December, the Sentix confirms…
Chinese deflationary pressures intensified in November, with CPI ticking down to 0.2% y/y from 0.3% in October. Producer prices deflation eased, with prices falling 2.5% y/y, less than -2.9% y/y a month prior. The weak data prompted a Politburo statement…
In the final installment of their “PIGS Have Wings” special series, our European investment strategists took a deep dive into the Spanish economy and financial assets. Spain outperformed most developed markets since 2022, with strong gains in both…
The US Treasury yield curve recently bull flattened, with the 2-year/10-year segment almost completely flat. Meanwhile, the breakeven inflation curve has re-inverted, with 2-year breakeven inflation rate now above the 10-year maturity by about 25 basis…
Our Counterpoint strategists published their 2025 outlook; they see major market movements for the year ahead hinging on Japan. Japan remains the cornerstone of global liquidity, with rising Japanese real yields posing a key risk. Monitoring Japanese real…
Our GeoMacro Strategy service published their 2025 outlook, and they see three peaks shaping the year: Peak fiscal, peak-deglobalization, and peak geopolitical risk. In 2024, our colleagues’ bullish economic outlook proved accurate in the first half, while…
Our European Investment Strategy and GeoMacro Strategy teams published a joint report, digging into the structural challenges behind Europe’s economic underperformance, while pointing out to potential turnaround opportunities. Europe’s prolonged…
Our Global Asset Allocation strategists published their monthly tactical asset allocation report and foresee a change of trend for 2025. “Thin is back in” for government budgets, growth, and valuations. The post-COVID recovery was marked by government…
France finds itself in a unique, thorny situation. Can it heave itself out of it? And what does it mean for investors?