United States
The Fed Beige Book continues to provide a somber outlook for the US economy. It highlighted that “overall economic activity was relatively unchanged since the previous report” and that “contacts generally expected little growth in the months ahead.” In…
According to BCA Research’s US Political Strategy service, the US political and geopolitical context has not yet verifiably improved, and they doubt it will prior to 2024. Any market rally will be capped at an unexpected time over the coming months. The US…
Investors should stay defensive on recession risks until they subside meaningfully.
The gauge of manufacturing activity in the state of New York sank a whopping 21.7 points to -32.9 in January, largely disappointing expectations of a marginal improvement to -8.6. Notably, new orders and shipments dropped by 27.5 and 27.7 points respectively,…
US equity market dynamics are consistent with an improvement in risk-on sentiment in financial markets. US cyclical equities have outperformed defensives by nearly 7% since the beginning of July. However, this market action is inconsistent with the macro…
Speculative-grade US corporate bonds have been rallying alongside other risky financial assets recently. In particular, yields on US junk bonds have declined by roughly 160bps since early October and credit spreads have narrowed. Although continued signs…
China's reopening is much more positive for the Chinese economy than it is for the rest of the world, as it will boost its domestic service sector activity and consumer spending much more than the industrial economy. A slowdown in Chinese industrial activity will put downward pressure on its demand for raw materials and energy, helping the world avoid another spike in inflation. Upgrade Macau casinos to overweight as the key beneficiaries of reopening. Off-shore TMT and bank shares face structural headwinds.
In response to lower energy prices and China’s reopening, European assets prices are outperforming. Will the ECB spoil the party?
Preliminary results from the University of Michigan survey suggest that consumer sentiment firmed sharply in January. The overall index increased from 59.7 to 64.6, the highest since April and largely beating expectations of 60.7. Notably, the current…
Several large diversified US banks reported higher-than-expected Q4 earnings on Friday, partly aided by the tailwind from higher interest rates on banks’ net interest income. Other sources of banks’ income include investment banking and trading revenues. In…