United States

Pump Up Your Equity Portfolio With A Barbell Strategy

The US economy remains on a path towards a recession, most likely starting in late 2024 or early 2025. For now, investors should maintain a benchmark allocation to equities, but employ a barbell strategy of overweighting defensives and materials.

2 years ago

Global

GeoMacro

Could Democrats Win The House Of Representatives?

Republicans are favored in the House and Senate even if they do not win the White House. A Democratic sweep is a 20% risk. The policy implication would be inflationary, but not so much as under a Republican sweep. Election uncertainty should increasingly weigh on cyclical and high-beta assets in the second half of 2024.

2 years ago

Essentials

ISM Services PMI’s Surge Hides Softer Dynamics

The ISM Services PMI largely surpassed expectations in May. The headline index grew by 4.4 ppt to 53.8, returning to expansion following April’s one-month contraction. Double-digit jumps in new export orders (13.9 ppt) and business activity (+10.3 ppts) drove…

2 years ago

Essentials

MBS Spreads Have Room To Tighten

According to BCA Research’s US Bond Strategy service, Mortgage-Backed Securities are currently priced below fair value. Mortgage-Backed Securities outperformed the duration-equivalent Treasury index by 49 basis points in May, bringing year-to-date excess…

2 years ago

CoreMacro

Who Will Find Gold In The AI Gold Rush, And When?

The long-term winners from the generative-AI gold rush are unlikely to be the ‘picks and shovels’ stock Nvidia or the overvalued US superstars of Web 2.0. We discuss the structural investment implications. Plus: time to go tactically overweight global consumer discretionary (RXI).

2 years ago

Essentials

Could The Fed End Up Being Too Proactive In 2024?

The moderation in core PCE in April was a step in the right direction towards a Fed easing. Our Global Investment Strategists also highlighted that outside of a few pandemic-related “catch-up” categories such as shelter, health care, and auto insurance, CPI…

2 years ago

Essentials

The Outlook For Capex Runs Through Consumers

Consumption accounts for two-thirds of the US economy, and our recession view relies heavily on the deteriorating outlook for US consumers. That said, dissecting US GDP into its components reveals that consumption tends to merely stabilize during…

2 years ago

Essentials

High-Yield Downgrades Foreshadow Broader Deterioration

Corporate and junk bonds are the fixed-income sectors that are most exposed to an economic downturn. We’ve highlighted that markets continue to price in a Goldilocks scenario, with spreads narrowing despite ongoing deterioration in the labor market. Spreads…

2 years ago

Essentials

Recession Is Still On The Horizon

According to BCA Research’s Global Asset Allocation service, the economy has been in the “Overheating” phase of the cycle for a while, with signs of slowing growth but also stubbornly high inflation. The most likely next phase is “Recession,” though the…

2 years ago

Essentials

Labor Demand Weakens Further Than Anticipated

US job openings softened from 8.5 million in March to 8.1 million in April, below expectations of 8.4 million, and the lowest level in three years. Healthcare and social assistance, as well as leisure and hospitality, drove the decline while openings in the…

2 years ago

United States

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