Recessions often begin seemingly out of the blue when the economy’s temperature falls enough to set in motion adverse feedback loops that cause unemployment to rise. We expect the US economy to suddenly freeze over towards the end of this year or in early 2025. For now, a benchmark allocation to equ...
Over the next six months, the deterioration in non-US growth will occur earlier and be more pronounced than in the US. This expectation reinforces our confidence to bet on the strength of the US dollar. As usual, the flip side of the US dollar strength will be weakness in EM risk assets....
Energy markets are balanced in the short run, which keeps our Brent price forecasts at $95/bbl and $105/bbl in 2024 and 2025. Structurally, we see an upward bias to inflation, as geoeconomic fragmentation fundamentally alters supply chains; higher costs follow. Military access to oil will be priorit...
Our Valentine’s Day report is about two love stories: the infatuation with US tech and China’s infatuation with housing. We describe how these love stories will end, and why Europe could be the winner....
Looking at small caps at the global aggregate level can be misleading. Small caps are cheap and oversold in the DM universe, but expensive and overbought in EM. Watch closely for clarity on the coming recession to upgrade DM small caps to overweight relative to DM large caps. Lighten up small cap ex...
We created a sector selection scorecard based on performance of sectors under various macroeconomic regimes while taking into consideration revisions to expected earnings growth and valuations in a historical context. Our total sector selection scorecard suggests overweighting defensives such as Uti...
The global memory chip market will improve in 2024, characterized by a further rebound in memory chip prices and decent demand growth. Artificial intelligence (AI) memory and a replacement cycle of servers, smartphones, and PCs will propel memory chip shipment. We remain overweight South Korean equi...
