Global
No clear risk-on/risk-off pattern emerged from July’s market performance data. On the one hand, consistent with a risk-off environment, US bonds ranked highest in the monthly return distribution, while pro-cyclical industrial metals and oil lagged.…
The market is pricing in a soft landing, but we see growing signs that the global economy is faltering. Investors should be defensively positioned.
Following the recent escalation in the Middle East conflict, BCA Research’s Geopolitical Strategy service upgrades its subjective odds of a major oil supply shock to 37%. Volatility should spike again as investors contemplate the prospect of rising oil prices…
Brent prices have fallen 6% so far in July, reversing their June gains. Interestingly, these losses are occurring despite escalating Middle East tensions and quickening Chinese industrial profit growth in June (see The Numbers), both of which are…
Preliminary PMIs suggest that, with the exception of the Eurozone, growth was still resilient in DM economies in July. Composite PMIs expanded across the board, at a faster pace in the US and the UK, and from previously contractionary levels in Japan. …
BCA’s composite sentiment indicator, compiled from surveys of advisors, individual investors and traders, surged over the past three months from already very optimistic levels. It reached 63% last week, a six-and-half-year high and the third highest point in…
Export dynamics from small open economies are a good bellwether for global growth conditions. Taiwan export orders decelerated from 7.0% y/y to 3.1% in June, badly disappointing expectations of a double-digit growth rate and following two consecutive…
Today’s AI craze bears some resemblance to the late-1990s dotcom boom. We highlight three lessons from that period which are relevant today. Lesson #1: Productivity gains from the rollout of a new technology can take time to accrue. The dotcom…
Investors should overweight US assets and de-risk their portfolios in anticipation of a major increase in policy uncertainty and geopolitical risk surrounding the US election and its global ramifications.
Outside of the US, forward earnings have grown at an underwhelming pace this year. Forward earnings for MSCI US have expanded by 7.3% in 2024YTD while MSCI EMU has remained flat and MSCI Japan has contracted by 4.9%. Against this backdrop, EMs stand out as…