Capital Daily Hawkish ECB raises risk of a surge in peripheral spreads While the latest hawkish turn by the ECB hasn’t had much of an impact on euro-zone “peripheral” spreads, we think the risk of ECB policy normalisation sparking a sell-off in peripheral bond markets... 27th May 2022 · 7 mins read
Capital Daily Falling profit margins another potential threat to the S&P 500 Although the first estimate of US corporate profits for Q1 2022 didn’t reveal a big squeeze on margins in the nonfinancial sector, this could yet be another headwind for the US stock market: we doubt... 26th May 2022 · 5 mins read
Capital Daily Chinese stimulus may not save the day this time around China’s policymakers have had a busy few weeks. Between the ongoing lockdown policy, the depreciation of the renminbi, and the various fiscal and monetary stimulus measures that have been rolled out... 25th May 2022 · 4 mins read
Capital Daily The relationship between the US dollar and the stock market We anticipate a renewed rally in the US dollar and further declines in US equity prices over the next twelve months or so. 24th May 2022 · 5 mins read
Capital Daily We think the peak in Treasury yields is still to come We doubt that the 10-year Treasury yield has peaked in this cycle. Admittedly, it has fallen back markedly on net over the past couple of weeks; having briefly climbed above 3.20% earlier this month... 23rd May 2022 · 5 mins read
Capital Daily We doubt consumer staples will continue to underperform “tech” We doubt the consumer staples sector, which has been hit particularly hard in the recent sell-off in the S&P 500, will continue to underperform “tech”-heavy sectors. ECB Drop-In (24 th May 10:00 ET/15... 20th May 2022 · 7 mins read
Capital Daily What to make of the latest falls in the S&P 500 Although the S&P 500 has stabilised at the time of writing, its 4% drop yesterday has brought the index close to a bear market. We suspect there may be more pain to come for equities, even if the US... 19th May 2022 · 5 mins read
Capital Daily The ECB, the Fed, and the euro The hawkish tone of the latest flurry of ECB and Fed speakers suggests that, despite the recent drop in equity markets and widening of credit spreads, policymakers are determined to press ahead with... 18th May 2022 · 7 mins read
Capital Daily Near bear market for S&P 500 doesn’t mean it’s out of the woods The glass-half-full case for US equities is that they have already fallen about as far they do in a typical recession, so they now have plenty of upside if, as we happen to project, the US economy... 17th May 2022 · 7 mins read
Capital Daily Some market implications of China’s lockdowns China’s slowdown could keep the renminbi under pressure, and may have gloomy implications for global markets as well. 16th May 2022 · 6 mins read
Capital Daily Weighing up the outlook for the S&P 500 History suggests the S&P 500 might recover quite quickly once it reaches its trough, but that may be a way off yet and still-rosy earnings expectations could be an obstacle. 13th May 2022 · 7 mins read
Capital Daily We doubt the drop in Gilt yields and sterling will persist We doubt that the recent fall in the yield of 10-year Gilts will continue. Indeed, we expect it to rebound to a significantly higher level than its recent peak over the next year or so. We also think... 12th May 2022 · 6 mins read
Capital Daily No sign yet that peak inflation is a watershed moment for markets So far, at least, tentative evidence of a peak in inflation in today’s US consumer price index report has not been a watershed moment for US government bonds or equities. Both Treasuries and the S&P... 11th May 2022 · 6 mins read
Capital Daily The US dollar, risk sentiment, and high-beta currencies Even if the current rout in the US stock market worsened and caused the Fed to reassess how much additional monetary tightening is necessary, we suspect the US dollar would stay strong amid heightened... 10th May 2022 · 5 mins read
Capital Daily Growth might underperform value for a while yet While US equities have fallen across the board today, “growth” stocks have continued to fare even worse than their “value” peers. We think that this underperformance has further to run, given that the... 9th May 2022 · 6 mins read
Capital Daily Three market trends as payrolls clear the Fed to press ahead We expect three of the major trends in markets this week – higher long-dated US Treasury yields, a stronger US dollar, and faltering equity markets – to continue for a while yet. 6th May 2022 · 7 mins read
