Recession-Hard/Soft Landing
The Global Manufacturing PMI’s 0.8-point decline to a six-month low of 48.8 in June indicates that manufacturing conditions deteriorated at the end of Q2. The forward-looking New Orders and New Export Orders components both fell deeper in contraction…
The ISM PMI sent a pessimistic signal about US manufacturing conditions in June. The headline index dropped 0.9 points to a 3-year low of 46.0 – it eighth consecutive month below the 50 boom-bust line. This is consistent with the S&P Global PMI which fell…
The performance of financial markets continued to improve in June, with most of the major financial assets we track generating positive abnormal returns. The US equity rally – which had been narrowly concentrated among tech stocks for most of the year –…
On a 12-month investment horizon, BCA Research’s Global Asset Allocation service recommends a defensive stance: Overweight government bonds, and underweight equities and credit. The US stock market trades on 19x forward earnings (and that is based on…
In a recently published report, our China Investment Strategy team revisited the issue of a liquidity trap in China. A liquidity trap is a condition that occurs when lower borrowing costs are unable to boost credit demand and economic growth, i.e., when low…
In their just-published update of US housing market conditions, our colleagues at the BCA Bank Credit Analyst focus on whether May’s strong showing in new home starts and sales in May – up 21% and 12%, respectively – is a head fake or the beginning of a…
We build a four-stage business cycle framework based on economic growth and capacity utilization, and then analyze historical returns for most major asset allocation decisions for each stage. Given that we are in the early recession stage (negative growth coupled and an overheated economy), our framework recommends a defensive positioning across all asset classes.
In this Strategy Outlook, we present the major investment themes and views we see playing out for the rest of 2023 and beyond.
The preliminary inflation prints for June in the major euro area economies highlight a growing divergence in inflation outcomes. There was good news: headline CPI inflation in Italy fell to 6.7% in June from 8.0% in May, while Spanish headline inflation fell…
Our Counterpoint service argues that it is not enough that inflation stabilizes at 3 percent for inflation expectations to be anchored and central banks must make inflation undershoot 2 percent for some time to prevent a repeat of the 1970s. The team…