Fixed Income
Investors are wondering about the risk of a US government shutdown as the September 30 deadline draws near. Would a shutdown be a significant negative catalyst for the stock market? While there is a high risk of a government shutdown, there are more…
BCA Research's US Bond Strategy service recommends a cautious allocation to high-yield munis, but the team still prefers the sector over high-yield corporate bonds. Along with junk-rated corporate bonds, high-yield munis have been one of the top performing…
Japanese real GDP grew at an annualized pace of 6% year-on-year in Q2. Reading the tea leaves from the release, public investment rose by 5% quarter-on-quarter annualized, while residential investment jumped by a whopping 7.7%. The big takeaway, however, was…
The selloff in US Treasuries has accelerated in recent weeks and the 10-year US Treasury yield is quickly approaching the cyclical peak of 4.25% that was set last October. While momentum is certainly on the side of the bond bears, our US Bond team doesn’t see…
High-Yield municipal bonds have performed well in recent years, but valuations are now stretched. We recommend an underweight allocation, though we prefer high-yield munis over high-yield corporate bonds.
Inspired by a client’s questions, we examine the rationale behind the implementation of the trailing stop governing our near-term asset allocation recommendations.
According to BCA Research’s Emerging Markets Strategy service, the gap that has formed between the S&P 500 price and its operating profit margins, as well as the divergence between the S&P 500 Forward P/E ratio and the 30-year TIPS yield are…
Numerous divergences have opened up between global risk assets and global business cycle variables. These gaps are unsustainable, and odds are that the recoupling will occur to the downside with risk assets selling off.
As expected, the US CPI release shows the monthly headline and core inflation gauges were both unchanged at 0.2% m/m in July. Notably, annualized monthly core inflation fell below 2% for the second consecutive month. Similarly, the annual change in core CPI…
The rise in bond yields over the past few weeks has made some investors wonder whether US Treasurys and other government bonds really are a good hedge against recession. Could there be an environment in which the economy goes into recession but bond yields…