Fiscal Policy

China’s Stimulus: Necessary But Not Sufficient

Stay cautious on Chinese stocks. Equity investors should use any rebound in onshore stock prices to downgrade A-shares from overweight to neutral within global and EM equity portfolios. Remain underweight Chinese investable/offshore stocks. Onshore bond yields will drop to all-time lows. Continue receiving 10-year swap rates. The currency will continue depreciating versus the US dollar in the coming months.

3 years ago

Emerging Markets China

Essentials

Deflationary Pressures In China

China’s CPI and PPI inflation updates indicate that deflationary pressures continue to dominate the domestic economy in June. Producer prices declined at a faster pace than in the prior month, falling by -5.4% y/y following a -4.6% y/y decrease in May, and…

3 years ago

China

Essentials

US Fiscal Policy: Gridlocked

According to BCA Research’s US Political Strategy service, US fiscal policy is marginally negative for the economy and marginally increases the odds of recession in 2023-24. It is not a positive catalyst for equities in the third quarter. Fiscal policy is…

3 years ago

Essentials

June In Review

The performance of financial markets continued to improve in June, with most of the major financial assets we track generating positive abnormal returns. The US equity rally – which had been narrowly concentrated among tech stocks for most of the year –…

3 years ago

China

Essentials

China: Continued Economic Disappointments

The June NBS PMI data revealed that growth conditions have deteriorated on the margin. The new orders and exports for overall manufacturing as well as for services have not improved and remain below 50. In addition, the import component of the…

3 years ago

China

Essentials

China Is Entering A Liquidity Trap

In a recently published report, our China Investment Strategy team revisited the issue of a liquidity trap in China. A liquidity trap is a condition that occurs when lower borrowing costs are unable to boost credit demand and economic growth, i.e., when low…

3 years ago

China

Essentials

Unwarranted Policy Tightening

In a recent report, our Emerging Markets Strategy team posited that the bear market in Malaysian stocks will be prolonged. Disinflationary forces have taken hold of the Malaysian economy: money supply has plunged, bond yields are falling, and the yield…

3 years ago

Equities

Hit, Miss, Moving Forward

Momentum, high cash balances, FOMO, and expectations of soft landing drive the market higher. This rally may continue for a while, but macroeconomic headwinds are intensifying and will eventually derail the rally. It is too early to celebrate victory.

3 years ago

US Equities AI

CoreMacro

Turkey: Time To Go In?

Assuming yesterday’s policy rate hike is a sign that Turkey is finally veering towards orthodox economic policies; should investors rush in?

3 years ago

Emerging Markets

GeoMacro

US Energy Outlook: Democracies Run On Oil

Special Report

We are strategically bullish on the outlook of the energy sector. Domestic and external political constraints asserted themselves, restraining the most negative impulse against this sector by the Biden administration. Go long energy versus cyclicals (ex-tech).

3 years ago

Fiscal Policy

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