Clients should forgive us for being too gloomy at the start of the year -- it is difficult to be optimistic in the dead of a Montreal winter. However, with springtime comes the reflation trade, born on the wings of massive Chinese…
The ultimate driver of bank profitability is loan growth. A brighter economic backdrop in the U.S. compared with both the euro area and Japan paints a rosier picture for relative credit growth opportunities (third panel). Already, bank…
Bank stocks comprise the bulk of financials indexes' market cap weights in the G3 (U.S., Euro Area and Japan). Thus, bank profit growth should largely define each region's financials sector earnings path, and by extension,…
While relative financials stock returns tend to be highly correlated across regions, especially in the developed world (top panel), extremely divergent monetary policy developments and operating metrics suggest that these long-standing…
We continue to recommend a cautious investment stance, staying at benchmark duration, as the recovery in risk assets looks more like a counter-trend rally than the start of a new bullish run.
We are sending you the Q2 Global Investment Strategy Outlook, which discusses the ten predictions we expect to drive global financial markets throughout the rest of the year.
Fed dovishness is weakening the U.S. dollar. As the ECB and BoJ move to the sidelines and the Fed remains reluctant to hike rates, the euro and Japanese yen should continue to recover versus the greenback.
Several tail risks appear less ominous compared to last month. Nonetheless, the earnings outlook has not improved and the FOMC will turn more hawkish ahead of the June meeting. Stay defensively positioned.