Highlights The Evergrande crisis is not China’s Lehman moment. Nonetheless, Chinese construction activity will decelerate further in response to this shock. Global equities are frothy enough that a weaker-than-expected Chinese…
The performance of global risk assets improved somewhat on Tuesday following Monday’s tumble on the back of concerns about the potential implications of an Evergrande default. Nevertheless, risks remain elevated. A key…
Highlights We cannot predict how China will manage Evergrande precisely but we have a high conviction that it will do whatever it takes to prevent contagion across the property sector. However, China’s stimulus tools are losing…
Highlights The House Ways and Means Committee’s tax proposals are a slight positive surprise for investors. They envision raising $1.5 trillion in new revenue, down from expectations of $2.6 trillion. The House’s tax plans…
Feature Chart 1Chinese Offshore Stocks Tumbled Amid Regulatory Crackdowns Relative to the global equity index, onshore and offshore Chinese stocks have fallen by 18% and 32%, respectively, since their peaks in mid-February (…
Highlights Economic policy uncertainty is rising in the US and will generate volatility this fall. But by the end of the year the result should be more fiscal reflation. Biden’s approval rating is now “underwater”…
Highlights An Iran crisis is imminent. We still think a US-Iran détente is possible but our conviction is lower until Biden makes a successful show of force. Oil prices will be volatile. Fiscal drag is a risk to the cyclical…
Highlights The US government issued its first-ever water-shortage declaration for the Colorado River basin in August, due to historically low water levels at the major reservoirs fed by the river (Chart of the Week). The drought…
This week I have been holding client calls and roundtables with clients located in the EMEA region. In next week’s report we will share our answers to the most common client questions. In the meantime, this week we are sending you a…