Business Cycles
Within alternatives, BCA Research’s Global Asset Allocation service favors Private Credit since yields are in double-digits and lenders are in a strong negotiating position. Private Credit (Overweight): Considering the current trend of extremely…
Downside risks to equities are building. Rates, the dollar, and energy prices will remain elevated into yearend. This trifecta makes a soft landing less likely than before and hurts corporate profits and multiples. However, high cash balances may offer downside protection against a sharp correction.
The US Personal Income and Outlays report for August sent a positive signal about the disinflationary trend. The core PCE deflator – the Fed’s preferred inflation gauge – slowed to a 33-month low of 0.1% m/m, below expectations that it would remain at 0.2%…
The BoJ remains an outlier among global DM central banks. While many of its peers are now debating whether to end their rate tightening cycles, the Japanese central bank has not even started raising interest rates yet. Nevertheless, Tokyo’s CPI report showed…
According to BCA Research’s Emerging Markets Strategy service, US Treasury yields are set to overshoot before topping out. The selloff in global bonds is becoming advanced, but there will be more damage to bond prices before yields peak. Even…
German inflation delivered an optimistic signal about the disinflation trend on Thursday. The headline CPI EU harmonized index collapsed from 6.4% y/y to 4.3% y/y in September– its lowest level since September 2021 and slightly below expectations of 4.5%.…
Financial conditions tightened meaningfully in the first three quarters of 2022 as market participants anticipated an aggressive monetary tightening cycle. However, this tightening phase ended in late-2022. Indeed, economic conditions have been resilient this…
Emerging Market equities have been in a broad trading range all year. The MSCI index peaked on January 26, then bottomed in mid-March before recouping nearly all of its losses over the subsequent months. However, after nearly reaching its February top at the…
US durable goods order delivered a positive surprise on Wednesday. New orders unexpectedly expanded by 0.2% m/m in August, beating expectations of a 0.5% m/m decline. Similarly, core capital goods orders (a proxy for business spending plans) and core capital…
The unexpected increase in Chinese industrial profits in August sent a positive signal about the economy. Industrial profits posted its first year-over-year increase since the second half of last year, surging by 17.2% y/y following a 6.7% y/y contraction in…