United States
June US housing data surprised to the upside, but the broader sector is still weak, reinforcing our modest underweight on equities. Housing starts rose an annualized 4.6% m/m, and building permits ticked up 0.2% after a 2.0% decline in May. Gains were…
Consumer sentiment improved modestly in July, but remains at levels that still point to subdued spending, reinforcing our defensive stance. The preliminary University of Michigan index rose to 61.8 from 60.7 in June. Expectations edged up to 58.6, while…
BCA’s Global Asset Allocation strategists find that international diversification outperforms home bias in both bonds and equities, especially when FX risk is hedged. Unhedged foreign bonds have consistently underperformed domestic bonds across nearly all…
The fact that the US economy has been slower to deteriorate than in past cycles is entirely consistent with our kinked Phillips curve framework. We will be looking to our MacroQuant model for guidance on when to turn fully defensive.
Jay Powell won’t be removed as Fed Chair before the expiry of his term next May, but we will learn the identity of his replacement this year, setting up a potentially awkward “shadow Fed Chair” situation.
Our Geopolitical and Equity Analyzer teams recommend a Value and Quality-focused equity basket in Industrials, Financials, and Consumer Discretionary to capture OBBBA-driven upside. These sectors are the primary beneficiaries of the newly passed stimulus…
The July Philly Fed beat expectations with broad improvement in activity, but low growth, inventory buildup and margin pressure remains a risk for equities. The headline index rose to 15.9 from -4.0 in June. New orders, shipments, and employment all…
June retail sales beat across the board, but inflation and a slowing trend reinforce our defensive stance. Headline and core retail sales rose 0.6% m/m, while the control group climbed 0.5%. Spending on food services and drinking places, used as a proxy for…
The S&P 500 sits near all-time highs, but sentiment and positioning suggest euphoria has not driven this rally. Prices are elevated, yet the SKEW/VIX ratio sits at 8.3, or its 67th percentile. While not at extreme levels associated with reversals, it…
The July Empire Fed beat estimates, but survey volatility, inventory distortions, and shallow strength dampen this signal. The headline index surged to 5.5 from -16.0, supported by gains in shipments, employment, and capex intentions. However, new…