Economy
Investors are scrutinizing US equity sectors as they try to discern new areas of stress and vulnerability. The commercial real estate market is next in line in the "wall of worry." It is particularly concerning that small- and mid-sized banks, vulnerable to…
BCA Research’s US Bond Strategy service concludes that the Fed’s use of its balance sheet to provide reserves to distressed banks means that interest rates will be higher than in an alternative scenario where the Fed didn’t deploy its balance sheet in that…
China is launching a diplomatic charm offensive to improve relations with the world excluding the United States. But China’s proposals in Ukraine and the Middle East are overrated in their ability to restore global stability and reduce geopolitical risk.
The German IFO delivered a positive surprise on Monday. The Business Climate Index increased from 91.1 to a 13-month high of 93.3, beating consensus estimates it would remain broadly unchanged. An unanticipated 2.8-point rise in the Expectations component…
Profits of Chinese industrial firms dropped by 22.9% y/y in the first two months of 2023, extending and deepening the contraction that began in July. Notably, the weakness has been particularly pronounced across the manufacturing sector, which experienced a…
Friday’s flash PMI releases suggest that price pressures continue to moderate in both the US and the Euro Area. Both regions recorded the greatest improvement in supplier delivery times since the beginning of their respective surveys. And although…
According to BCA Research’s Emerging Markets Strategy service monetary policy shifts from tightening to easing are a necessary but not sufficient condition for investors to turn bullish. At BCA, we use riot points as part of our framework to identify major…
According to flash PMIs, service sector activity accelerated across most major DM economies in March. In the US, the preliminary services PMI unexpectedly increased by 3.2 points to an 11-month high of 53.8, beating estimates of a decline to 50.3. Similarly,…
To the extent that Treasury yields typically rise when US economic data is strong, and decline when growth momentum disappoints, changes in bond yields have historically moved in tandem with the level of economic data surprises. However, the two series have…
According to BCA Research’s Global Investment Strategy service, recent banking stresses will have a moderate but not severe impact on economic activity. On the positive side, banks are much better capitalized than they were in 2008. The quality of their loan…