Spécialités

Warren Stoddart, président et chef de la direction du Groupe financier Connor, Clark & Lunn, s’est récemment joint à Chas Burkhart, chef de la direction de Rosemont, à titre d’invité au balado Global Investment Leaders.

Eurozone money trends remain too weak to support an economic recovery. A relapse in the latest business surveys could mark the start of a “double dip”. Three-month rates of change of narrow and broad money – as measured by non-financial M1 and M3 – were zero and 3.3% annualised respectively in May.

Labour’s housing and green energy plans may help drive up the market.

Les cas où la couverture est bénéfique et ceux où les investisseurs canadiens peuvent gagner à ne pas être couverts.

A recovery in the OECD’s US composite leading indicator could be reversing, in which case recent underperformance of cyclical equity market sectors versus defensives could extend. The OECD indicator receives less attention than the Conference Board US leading economic index but its historical performance compares favourably. The correlation coefficient of six-month rates of change is maximised with a two-month lag on the OECD indicator, i.e. the OECD measure slightly leads the Conference Board index.

Exploring the lucrative opportunities and growth in the global waste management.

Chinese May money numbers were weak even allowing for a distortion from a recent regulatory change. The preferred narrow and broad aggregates here are “true M1” (which corrects the official M1 measure for the omission of household demand deposits) and “M2ex” (i.e. M2 excluding bank deposits held by other financial institutions – such deposits are volatile and less informative about economic prospects). Six-month rates of change of these measures fell to record lows in May.

Surprises in EM elections see political risks spiking.

The Bank of Japan’s attempt to withdraw policy accommodation is understandable but misguided. Monetary weakness suggests that the economy is on course to return to deflation. The BoJ’s difficulties stem from the inflationary policy mistake of the Fed and other G7 central banks in 2020-21.

Surprises in EM elections see political risks spiking.

Previous posts suggested that a recovery in US money growth would stall in Q2 / Q3 as Fed QT was no longer offset by monetary deficit financing (at least temporarily). The broad M2+ measure – which adds large time deposits at commercial banks and institutional money funds to published M2 – fell by 0.1% in April, with available weekly data suggesting marginal growth in May. Unexpectedly, however, the narrow M1A measure tracked here – comprising currency in circulation and demand deposits – rose by a bumper 1.8% in April.

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Global (i.e., G7 plus E7) six-month real narrow money momentum returned to positive territory in March, consolidating in April. It has also crossed above six-month industrial output momentum, turning one measure of global “excess” money positive. Should investors, therefore, adopt a positive view of economic and market prospects?

The MPC’s forecast in November was that annual CPI inflation would average 3.5% in Q2 2024 (November 2023 Monetary Policy Report (MPR), modal forecast assuming unchanged 5.25% rates). April’s drop to 2.3%, therefore, might be considered cause for celebration.

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