Highlights Portfolio Strategy A virtuous software capex upcycle will continue to bolster industry sales/profits in the coming months. We reiterate our high-conviction overweight recommendation on the S&P software index. Depressed…

Highlights Italy is a live drama. However, both Italy and Brussels have constraints that should lead to a compromise on fiscal stimulus. Italy will not leave the euro in the foreseeable future, and the European Central Bank has little…

Highlights The global trade slowdown will intensify, even if U.S. domestic demand remains robust. The large emerging Asian bourses will recouple to the downside with their EM peers. Market-neutral EM equity portfolios should consider…

Highlights Portfolio Strategy A near-term pullback in U.S. Treasury yields, still robust housing fundamentals and compelling valuations that reflect most, if not all, of the bad homebuilding news and offset thorny input cost inflation…

Highlights The dollar rally is set to continue. The dollar tends to perform best when real rates are rising and above r-star. We are entering this environment and raising our DXY target to 98. Moreover, the rest of the world is likely…

Special Report

Feature Chart I-1Recent Defaults Have Focused Attention ##br##On Corporate Health  The recent spike in defaults on bonds and loans in China, including missed debt repayments by local government financing vehicles (LGFV) and some…

Special Report

Highlights Uncovered Interest Rate Parity still works for currencies. However, it needs to be based on a combination of short- and long-term real rates. Currencies are also affected by global risk appetite, as approximated by…

Highlights So long as EM corporate and sovereign bond yields continue to rise, EM share prices will remain in a downtrend. EM corporate earnings growth has peaked while EM corporate profitability remains structurally weak. We…

Highlights Global Volatility Vs. Inflation: Global financial markets are staging a recovery after the February volatility shock, with the U.S. showing the most resiliency. With inflation still rising in the U.S., and with inflation…

Special Report

Highlights Butterfly Trades: Duration-neutral butterfly trades are the best way to gain pure exposure to changes in the slope of the yield curve while remaining insulated from parallel shocks. Yield Curve Models: In this report we…