Tag Archives: growth

Macroview Growth vs. value has been an important theme in long/short hedge fund portfolios--and a recent source of pain for some and profit for others owing to trend reversals this year. Amid slowing growth worldwide, growth stocks have outperformed value both in the US and Europe in the past decade and have been a profitable bet in long/short managers' books. There are some inherent differences in what value stocks represent in the two regions. Looking at the composition of the MSCI US...

Hard activity data for the euro area have improved since January, but downside risks still dominate despite the ECB’s support. At the very least, monetary policy looks set to remain exceptionally accommodative for an extended period of time. Euro area business surveys (PMIs and IFO) showed renewed signs of life in March after the drops seen in the first two months of the year. Surveys also highlighted the contrasting trend between the manufacturing sector, dented by a subdued external...

Published: 17th March 2016 Download issue: Financial markets search for a second wind Equity markets in developed economies rebounded in February, after spending December and January in an attitude of crisis. We think that this is just a tactical rebound, rather than a return to the bull market that prevailed on equity markets from 2009 to 2014. The fundamentals that limit the upside for equities have not changed; meanwhile, the limits of central bank policy are becoming increasingly...

According to SECO’s estimate, Swiss real GDP expanded by 0.4% q-o-q (1.7% q-o-q annualised, 0.3% y-o-y) in Q4, much better than consensus expectations (0.1%). Swiss GDP surprised on the upside in Q4, driven by robust consumption. Looking ahead, our scenario for the Swiss economy remains unchanged. For 2016, we expect Swiss GDP to expand by 1.1% and headline inflation to average -0.6%. The 0.4% q-o-q rise in the Q4 figure came after a downwardly revised Q3 figure of -0.1%  q-o-q. For 2015...

Recent moves will reassure financial markets. Nevertheless, excess credit growth raises the risk of a crash in China in a few years’ time. Lending to the economy reached record levels in China in January, suggesting that the authorities are prepared to do more to support growth. A stabilisation of the yuan and an admission by the authorities of mistakes in their approach to financial markets are also positive signs. Market fears around China may therefore temporarily abate. However,...

January’s employment report showed soft job gains. However, this was above all a statistical payback. Unemployment dropped, wage increases were higher than expected and the average workweek inched up. The overall situation remains healthy in the US labour market. Non-farm payroll employment rose by a soft 151,000 m-o-m in January, below consensus expectations (190,000). December’s figure was revised down (from 292,000 to 262,000), but November’s number was revised up (from 252,000 to...

With downside risks to the euro area outlook intensifying in recent weeks, we expect the ECB to respond by easing monetary conditions further. We leave our 1.8% growth expectation for 2016, largely based on improving prospects for domestic demand. Although we have left our forecasts for euro area GDP unchanged – 1.8% growth expected in 2016, well above trend – downside risks have intensified in recent weeks. There are both good and bad reasons to worry about the recovery but, in short,...

The US ISM Manufacturing index remained stuck at quite low levels and the Non-Manufacturing index declined further heavily. However, it remained pitched at a still relatively healthy level. The ISM Manufacturing index stabilised at a low level in January. But its Non-Manufacturing counterpart fell further heavily, although it remained pitched at a still relatively healthy level. Nevertheless, together with most other economic data published recently, these surveys unfortunately confirm...

The economy ended last year with soft momentum, and the sharp tightening in US financial and monetary conditions will undoubtedly weigh on US economic growth over the coming months. However, we remain upbeat about consumption and the housing sector. US real GDP, curbed by lower stockbuilding and a slowdown in consumption growth, grew by a soft 0.7% in Q4. We have cut our forecast for 2016. However, we still expect reasonably healthy growth (2.0%). In Q4 2015, US real GDP grew by a weak...

Brazil has certainly had its share of trials and tribulations lately: The economy is in recession, inflation is on the rise, budget deficits are widening, its sovereign debt rating has been downgraded, and the political environment is challenging. Yet, the country still has a lot going for it. It remains the largest economy in Latin America, and one that is rich in resources ranging from agricultural products to industrial metals. Home to some of the continent’s strongest political...