Recession-Hard/Soft Landing
Households have ramped up their cash holdings since the end of 2019, but the absence of an empirical link between cash and consumption leads us to believe that we’ve modestly overestimated the risk of consumer-driven overheating.
The hotter-than-anticipated US PPI report for January prompted a selloff in Treasuries on Friday. The monthly and annual changes in both the headline as well as the core measures of final demand PPI came in above expectations. Core PPI’s 0.5% m/m increase…
According to BCA Research’s Global Investment Strategy service, although the next recession is likely to be mild-to-moderate, the ensuing financial avalanche will be more severe. Valuations are highly stretched and hopes that today’s tech leaders will…
Recessions often begin seemingly out of the blue when the economy’s temperature falls enough to set in motion adverse feedback loops that cause unemployment to rise. We expect the US economy to suddenly freeze over towards the end of this year or in early 2025. For now, a benchmark allocation to equities is appropriate, but a more defensive stance will be necessary later this year.
Our Commodity & Energy colleagues see oil markets balanced in the short run, which keeps their Brent price forecasts at $95/bbl and $105/bbl for 2024 and 2025. That said, they note the odds are increasing demand growth could surprise to the…
According to BCA Research’s Emerging Markets Strategy service, the diminishing pace of disinflation in the US could pose a threat to US share prices in the near term. In the medium term, the key risk to US share prices is shrinking corporate profits. …
The US retail sales report for January delivered a disappointing message about consumer spending. The 0.8% m/m drop in overall retail sales was worse than expectations of a 0.2% m/m decline and marked the most severe monthly contraction since last March. The…
The first two regional fed manufacturing surveys for February delivered strong upside surprises. The New York Fed’s Empire Index surged from -43.7 to -2.4, unwinding its January slump. Similarly, the Philly Fed current activity index jumped by 15.8 points to…
The UK inflation release for January came in slightly softer than anticipated. Both headline and core CPI were unchanged on year-over-year basis at 4.0% and 5.1%, respectively – below expectations of slight accelerations. The 0.6% m/m decline in the headline…
Prices of agricultural commodities have come under intensified downward pressure this year. Corn, soybean, and wheat prices have fallen by 8.6%, 8.3%, and 4.9% respectively so far this year. Multiple factors are behind the selloff. First, ag prices…