US Economics Weekly Fed doubles down on its new policy framework Fed Chair Jerome Powell’s testimony to Congress – together with similarly-dovish speeches from key Board members this week – underlined the Fed’s new commitment to the full employment side of its... 26th February 2021 · 7 mins read
Asset Allocation Update Are REITs more at risk than equities from rising yields? We doubt that Treasury yields will continue to climb rapidly. However, that would be another reason to expect the returns from US REITs to fall short of those from ordinary US equities over the next... 25th February 2021 · 3 mins read
Energy Update Biden’s foreign policy and its energy market impact President Biden’s stance regarding international climate policy and the Iranian nuclear deal is very different from Donald Trump’s, but we are sceptical that he will be able to enact any significant... 25th February 2021 · 3 mins read
Asset Allocation Update Real yields, economic growth and the US stock market Although we forecast a further small rise in the 10-year Treasury yield this year, we doubt that this will upend the US stock market. 25th February 2021 · 3 mins read
US Employment Report Preview Recovery back on track With virus cases falling and containment measures being eased, we expect the partial reopening of the leisure and hospitality sector to translate into a 500,000 increase in non-farm payrolls in... 25th February 2021 · 3 mins read
US Data Response Durable Goods (Jan.) The stronger-than-expected rise in durable goods orders in January lifted them decisively above their pre-pandemic level, which is even more impressive given the still-subdued level of aircraft orders... 25th February 2021 · 2 mins read
Energy Data Response US Weekly Petroleum Status Report Despite the plunge in crude oil production, US crude stocks rose last week as refinery throughput plummeted. We expect the former to recover more quickly, which will support stocks in the near term. 24th February 2021 · 2 mins read
Global Economics Update The global implications of more US fiscal stimulus If passed in full, President Biden’s $1.9tn American Rescue Plan would constitute a fiscal stimulus worth 1.4% of global GDP, coming hot off the heels of the $900bn deal struck in December. While a... 24th February 2021 · 4 mins read
US Housing Market Data Response New Home Sales (Jan.) New home sales rose for the second consecutive month in January to 923,000 annualised. But rising mortgage interest rates and tight inventory point to a slowdown over 2021. Indeed, mortgage... 24th February 2021 · 2 mins read
US Commercial Property Update Two more years of underperformance for malls Permanent increases in certain types of online sales will mean that regional and super-regional malls underperform the other retail sub-sectors for at least the next two years. Our forecasts point to... 23rd February 2021 · 3 mins read
US Housing Market Data Response Case-Shiller/FHFA House Prices (Dec.) The house price boom continued in December, with month-on-month gains exceeding 1.0% on the FHFA measure for the seventh consecutive month. However, rising mortgage interest rates will weigh on... 23rd February 2021 · 2 mins read
US Economics Focus How much stimulus is too much? Much of the recent discussion on whether the proposed $1.9trn fiscal stimulus, equivalent to nearly 9% of GDP, could be too big when the output gap is closer to 3%, has glossed over the fact that the... 23rd February 2021 · 15 mins read
Commodities Weekly Biden’s State of the Union might boost metals prices Abnormally cold temperatures in the US, particularly Texas, have forced a significant share of US oil wells and refineries offline this week. Oil prices initially surged on the back of this disruption... 19th February 2021 · 7 mins read
US Housing Market Data Response Existing Home Sales (Jan.) Existing home sales managed to eke out a small gain in January, even as inventory fell to new record lows. But the lack of supply means activity will fall back to earth later in 2021, reinforced by... 19th February 2021 · 2 mins read
Commodities Update We expect commodities to underperform US equities Although we expect oil prices to rise a bit further this year, we doubt that we are in the early phase of a new “super cycle” in commodities. In fact, we project that the returns from commodities will... 19th February 2021 · 4 mins read
US Chart Pack Strong start sets the tone for the rest of 2021 The economy has started 2021 on a stronger footing than we anticipated. The 5.3% surge in retail sales last month underlined just how quickly stimulus cheques fed through to stronger spending on big... 19th February 2021 · 8 mins read
