While the July US CPI release provided a positive signal that the disinflationary trend remains intact, a key question going forward is how much more scope is there for this process to run. One way to answer this question is by…
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…
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 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…
Some thoughts on this morning’s inflation number and implications for Treasury yields and TIPS.
During the last economic expansion, a structurally overweight allocation to stocks was at least partially warranted by the idea that “There Is No Alternative” – or “T.I.N.A.” During the last…
The global economy will not enjoy an “immaculate disinflation” but will suffer a very maculate one due to China’s growth slowdown and restrictive monetary policy in the developed world. Investors should stay overweight low-beta…
The US NFIB’s Small Business Optimism Index increased by 0.9 points to an eight-month high of 91.9, beating expectations of a more muted 0.3-point increase. Although the level remains depressed below the 49-year average of…
Over the past two months, risk sentiment has improved amid receding fears of an imminent US recession. Economic data have been generating strong upside surprises and the US equity rally has broadened with cyclicals outperforming…
Time is running out on the Bank of England’s tightening cycle. UK economic growth is flirting with recession, unemployment is rising, house prices are contracting and inflation is decelerating. Markets are overestimating the eventual…