Asset Allocation Update What our revised forecasts for Treasuries imply for US equities Although we have revised up our forecasts for the 10-year Treasury yield between now and the end of 2025, we aren’t inclined to change our upbeat projection for the S&P 500 over this period. This is... 20th October 2023 · 4 mins read
US Chart Pack US Chart Pack (Oct. 2023) The renewed surge in long-term Treasury yields illustrates that the full impact of Fed tightening is still feeding through, and we continue to expect economic growth to slow sharply over the coming... 20th October 2023 · 1 min read
Asset Allocation Update On the relative performance of assets in China & the US We think both the recent outperformance of China’s sovereign bonds relative to those in the US and the underperformance of its equities will end – and may even reverse somewhat – in the near future... 20th October 2023 · 5 mins read
Capital Daily Bank equities may not recover much in the near term Big banks in the US have reported quite strong earnings in Q3 but, given our pessimistic view of the economy there, we doubt that their stocks will outperform much in the next couple of months. 19th October 2023 · 4 mins read
US Housing Market Rapid Response Existing Home Sales (Sep. 2023) Existing home sales fell to their lowest level since October 2010 in September as the increase in mortgage rates to a fresh 23-year high caused buyers and sellers to withdraw from the market. A... 19th October 2023 · 2 mins read
Bank of Canada Watch Bank on hold, may push back QT end date The business surveys point to rising recession risks and core inflation pressures were muted in September, suggesting that there is little chance of the Bank of Canada raising interest rates next week... 18th October 2023 · 7 mins read
US Commercial Property Apartment Metros Outlook West coast markets set to feel the greatest pain We expect demand to be weakest in the six major markets, but new supply is also set to be low in those markets. Elsewhere, we think southern metros will continue to see stronger absorption, though... 18th October 2023 · 7 mins read
US Housing Market Rapid Response Housing Starts (Sep. 2023) Single-family starts edged higher in September to 963,000 annualised from 933,000 in August and building permits also rose to a 15-month high. However, we don’t think this means single-family... 18th October 2023 · 2 mins read
US Economics Update Fed’s QT plans may not survive rate cuts next year The ongoing outflow of funds from the Fed’s reverse repo facility has completely offset the downward pressure on bank reserves from quantitative tightening (QT), suggesting that the Fed could continue... 18th October 2023 · 3 mins read
Canada Economics Update Output rapidly falling below potential The weakness of GDP growth in the second and third quarters means that the Bank of Canada is likely to make a marked re-assessment of its output gap estimates in its October Monetary Policy Report... 18th October 2023 · 3 mins read
Capital Daily Cyclically higher for shorter; structurally higher for longer We think equilibrium real policy rates in advanced economies will continue to rise over the next decade or so. That has profound implications for government bond yields and risky asset valuations. 17th October 2023 · 5 mins read
Canada Economics Update Housing Watch (Oct.) The renewed increases in mortgage rates and new listings mean we now expect house prices to fall by 5% over the next six months. The big risk, however, is that we are underestimating the degree to... 17th October 2023 · 4 mins read
US Rapid Response Retail Sales (Sep.) The unexpectedly-strong 0.7% m/m rise in retail sales in September continues the theme of consumer resilience in the face of higher interest rates, but with employment and wage growth slowing and the... 17th October 2023 · 2 mins read
Canada Economics Update Bank’s surveys unlikely to prompt another hike The Bank of Canada’s quarterly surveys show that businesses’ inflation expectations continue to decline, albeit slowly, and point to a growing risk that the economy will fall into recession... 16th October 2023 · 4 mins read
