Business Cycles
Germany’s IFO survey sent a downbeat message on Friday. The headline Business Climate Index fell by 1.7 points to 85.7, below expectations of 86.8 and near the 85.2 level at which it bottomed in October. A 2.4-point decline in the Current Assessment…
The final release of the University of Michigan’s gauge of US consumer inflation expectations unexpectedly rose in August. It shows 1-year ahead inflation expectations increased by a tenth of a percentage point to 3.5% (an upwards revision from the…
The Treasury market’s reaction to Fed Chair Jermone Powell’s Jackson Hole speech was relatively tame on Friday. Although there was some volatility during the speech, the 10-year yield ended the day broadly unchanged. Meanwhile, the 2-year yield rose by 5.5…
Since July, the DXY index is up 4.5% from the lows. On a broader trade-weighted basis, the Federal Reserve’s measure of the nominal dollar is up 2.9%. The usual suspects for dollar strength have been weakness in global export/manufacturing sectors, which have…
According to BCA Research’s Emerging Markets Strategy service, even though mainstream EM equities are cheap, their cyclical and structural growth prospects are poor. Equities of mainstream EM economies (excluding China, India, Korea and Taiwan) are…
China removed checks and balances in its political system to deal with a very dangerous economic transition. The transition is going badly, yet investors cannot rely on checks and balances to correct or prevent policy mistakes. The Taiwanese election is a looming bellwether.
US durable goods orders delivered a negative surprise on Thursday. The 5.2% m/m decline in new orders for manufactured durable goods came in below expectations of a 4.0% m/m decrease and marks the biggest monthly drop since April 2020. On the one hand,…
Nvidia’s stock price hit a fresh all-time high on Thursday after its blockbuster Q2 earnings call. The company reported it generated $13.51 billion in revenue last month (above expectations of $11.2 billion) and forecasted an increase to $16 billion in Q3…
In a June insight, we discussed the possibility of a sustained lumber rally due in part to resilient housing market activity in the US and supply constraints in Canada, a major exporter of lumber. Since then, prices have remained largely flat. On the…
In part 2 of this series, we discuss mainstream EM equity valuations and present the results of our cross-country analysis. The goal is to identify overweights and underweights within an EM equity portfolio.