Equities
Chinese new loans grew from CNY 10.2 tr to CNY 11.1tr in May, disappointing expectations of CNY 11.3tr. Year-to-date aggregate financing also came short of anticipations, growing from CNY 12.7tr to CNY 14.8tr. Notably, the contraction in M1 worsened from 1.4%…
The preliminary University of Michigan gauge of consumer sentiment unexpectedly dropped in June to 65.6 from 69.1, against expectations of improving morale. Consumers’ assessments of current conditions declined by a larger margin than expectations for the…
We continue to expect a recession by early 2025 but assign non-trivial odds to growth surprising to the upside until then. Our Global Investment Strategy team thus recommends investors adopt a barbell equity strategy as a hedge for the second half of 2024,…
1 in 17 older Americans workers have gone missing either through ‘excess retirements’ or ‘excess mortality’. The consequent dislocation of the labour market means that the Fed’s work is not yet done. We go through some investment implications. Plus: the China and Japan rallies are exhausted.
The Eurozone Sentix Economic index improved from -3.6 to 0.3 in June, easily surpassing expectations of a more muted improvement to -1.7. Notably, the Expectation and Current Situation subindices rose to 28-month and 13-month highs of 10 and -9, respectively.…
The NFIB’s Small Business Optimism (SBO) Index came in at 90.5 in May, above expectations that it would remain flat at 89.7. Despite the upside surprise, the Russell 2000 index closed down 40 basis points on Tuesday while the S&P 500 gained 30 bps to…
A decade of Canadian equity underperformance has led to a historical discount relative to the S&P 500. Sector composition largely explains this underperformance. Banks and natural resources stocks are overrepresented in the TSX while the US stock market…
According to BCA Research’s Geopolitical Strategy service, Modi’s loss of a majority government reduces the odds for more reforms, but does not change the structural outlook. Modi comes out of the election with greatly diminished political capital. While…
Although the comprehensive economic surprise indexes continued weakening in May, the metrics in our equity downgrade checklist haven’t softened enough to check more boxes now. While we continue to expect the US economy will enter a recession before year end, it is not yet certain and we remain tactically neutral.
Our colleagues at Global Investment Strategy have shown that postwar US (and global) manufacturing cycles have tended to last 3 years, divided equally between an 18-month up leg and an 18-month down leg. This framework has been a useful gauge for the…