US Economics Update Tide starting to turn for business investment There is mounting evidence to suggest that business investment growth is set to rebound, which should help drive overall GDP growth back above its potential pace in the second half of this year. 14th January 2020 · 2 mins read
US Data Response Consumer Prices (Dec.) The more muted 0.1% rise in core consumer prices in December suggests that the trend in underlying inflation is still close to 2%. With wage growth also moderating in recent months, there will be... 14th January 2020 · 2 mins read
Asset Allocation Update Gulf in S&P 500 and Treasury returns likely to shrink We expect the S&P 500 to outperform Treasuries by much less in 2020 than in 2019, as government bond yields edge up, the equity risk premium stops tumbling, and corporate earnings continue to... 13th January 2020 · 3 mins read
US Housing Market Update Debt-to-income ratio key for house price outlook With mortgage rates set for a period of stability over the next couple of years changes in credit conditions, and in particular debt-to-income ratios, will be an important driver of house prices... 10th January 2020 · 3 mins read
US Economics Weekly Phase one trade deal still light on details This week brought another round of, on the whole, positive economic data, while the signing of the phase one US-China trade deal next week should further bolster confidence. With tensions in the... 10th January 2020 · 9 mins read
US Data Response Employment Report (Dec.) The slowdown in payroll growth to a solid 145,000 last month shows that the economy is still creating more than enough jobs to keep pace with population growth. With economic growth bottoming out and... 10th January 2020 · 2 mins read
Global Markets Update Corporate bonds unlikely to make strong gains in 2020 Corporate bond markets in the US, the UK and the euro-zone have started 2020 on a strong footing, largely reflecting expectations that monetary policy there will remain accommodative for the... 10th January 2020 · 3 mins read
US Economics Update Is America at risk of Dutch disease? The surge in crude oil and natural gas production over the past decade has eliminated the petroleum-related trade deficit, but there is a risk that, echoing what happened in other countries that... 9th January 2020 · 5 mins read
US Economics Update Recession Watch (Jan.) The chances of a recession in 2020 are still barely higher than the normal background risk. Our composite 12 month ahead probit model – based on the yield curve, financial conditions and various... 9th January 2020 · 4 mins read
US Economics Focus Deregulation doing little to boost economy There is little to suggest that President Donald Trump’s deregulatory agenda has provided a significant boost to economic growth. While it may still be too soon to fully judge the impact, the... 9th January 2020 · 15 mins read
Global Markets Update Earnings unlikely to pick up the baton & boost equities While corporate earnings in the US will probably recover a bit this year, we think that they will fall short of expectations of a big rebound. And given that we don’t expect valuations to rise... 9th January 2020 · 3 mins read
US Economics Update ISM too downbeat on manufacturing outlook The continued slide in the ISM manufacturing index is increasingly hard to explain, but the wider evidence suggests the more upbeat Markit manufacturing PMI is providing a more accurate gauge of... 8th January 2020 · 2 mins read
US Housing Market Data Response Mortgage Applications (Dec.) A 1.9% m/m drop in mortgage applications for home purchase in December left demand at the end of 2019 unchanged from the start of the year. The boost to demand from lower mortgage interest rates was... 8th January 2020 · 2 mins read
US Data Response International Trade (Nov.) The sharp narrowing in the trade deficit to $43.1bn in November, from $46.9bn, was driven by another fall in imports that will be reversed in the coming months. Nevertheless, net trade appears to have... 7th January 2020 · 2 mins read
US Data Response ISM Manufacturing Index (Dec.) The further decline in the ISM manufacturing index in December, to its lowest level since June 2009, at face value suggests the US economy is teetering on the brink of recession. But it’s hard to put... 3rd January 2020 · 2 mins read
US Employment Report Preview Continued solid gains in payrolls We estimate that non-farm payrolls rose by 150,000 in December and, with the incoming survey data improving again, jobs growth looks set to remain solid throughout 2020 as well. 2nd January 2020 · 3 mins read
