reports
- Carlo Besenius
- Stjepan Kalinic
Q1 2019 Global Macro Outlook
Global GDP to advance at much slower 2.0% to 2.3% in 2019 Global inflation to drop under 3.5%, US under 2.0%, EU under 2% US economy to slow toward 1.7% to +2.2% in Q1, embedded USD-strength to weigh on trade, tourism, FDI US presidency and government policies (Mueller investigation; labor; trade; social) continue negatively impact US assets & cause further outflows EU GDP in Q1 to slow towards 10% to 1.2% growth, expect Q1 and full year 2019 downward revisions Chinese GDP in Q1 will sta...
- Carlo Besenius
- Stjepan Kalinic
110218 CGI Weekly Equities Strategy Update
With the holiday season around the corner and the period of seasonal strength for global equities taking off, we believe that investors this year have to factor three themes in their modelling for year-end performance results. US Midterm elections, which have historically fuelled equity market volatility and preceded mostly year-end market rallies. November 7, after months of uncertainty impacting investors’ minds, the political makeup of Congress will be significant for country and secto...
- Carlo Besenius
- Stjepan Kalinic
Q4 2018 Global Investment Outlook & Strategy
The global economy is decelerating further in Q4 due to less stimuli and due to trade penalties and geopolitical distress Productivity growth to improve slower due to labor,financial and product markets reforms in place, particl.Europe, Investment to slow (modernization of capital stock) Globally, equities still offer decent risk return opportunities for Q4 2018 of all asset classes, particularly from an DDM and total return aspect § A Q4 historical move of +7% is likely, mostly for develope...
- Carlo Besenius
- Stjepan Kalinic
090518 CGI Weekly Equities Strategy Update
Historically, the month of September has been the weakest month for US, EU and EM equity markets. During the month, analysts globally frequently review their estimates following release of Q2 results and lower their estimates for the remainder of the year, US equities, namely regarding US Dollar adjustments, as the past 5 months of USD strength affecting foreign earnings for US companies has not been assessed sufficiently by US equity analysts and strategists yet. We see the complaisance for...
- Carlo Besenius
- Stjepan Kalinic
082718 Weekly Currnecies & Fixed Income Strategy Update
Most markets globally responded favorably to Federal Reserve Chairman Jerome Powell’s comments on Friday at the Jackson Hole symposium. Equity prices on both sides of the border moved higher, bond prices rallied, the USD moved lower and the price of gold moved higher. A US report on durable goods orders showed a rather weak headline result. The headline showed that durable goods orders declined by -1.7% in July, missing the analyst consensus estimate calling for a decline of -0.8%. However,...
- Carlo Besenius
- Stjepan Kalinic
082018 CGI Weekly Equities Strategy Update
Short-term political concerns remain elevated. US economic focus this week is on news from the Jackson Hole Symposium. How many increases in the Fed Fund Rate beyond a 0.25% increase on September 26th will occur this year, one or two? Comments by Fed officials at the Symposium will give us a clue. White House economic advisor Larry Kudlow had confirmed overnight that the US and China will resume trade talks later this month, but he also cautioned that Donald Trump was committed to making su...
- Carlo Besenius
- Stjepan Kalinic
071518 Weekly Currnecies & Fixed Income Strategy Update
Short-term political concerns remain elevated. US economic focuses this week are on the FOMC announcement on the Fed Fund rate today and the July Employment report on Friday. We think for the coming weeks, yields for the 10-Year are capped at the flag's implied target of 3.14%, the highest level since mid-2011, implying a much faster pace of tightening, how might that affect equities? We still believe that investors should reevaluate their current holdings, and pay close attention to the sea...
073018 Weekly Global Equities Strategy Update
Short-term political concerns remain elevated. Issues include proposed US tariffs against Chinese goods valued at $500 BN stalled NAFTA negotiations, and the ramp up of US mid-term election political rhetoric Stocks are trading slightly lower at the start of the week, with all eyes on foreign central banks and ongoing trade negotiations around the world ahead of a keenly awaited policy announcement from the Bank of England later in the week. Investor sentiment is hampered by the prospect of ...
- Carlo Besenius
- Stjepan Kalinic
072318 CGI Commodities & Currencies Strategy Update
Global macro & geo-political commentary Short-term political concerns remain elevated. Proposed US tariffs against Chinese goods to be implemented in two months were increased again to products valued at USD 500 BN. NAFTA negotiations remain on hold and are unlikely to resume until after the US mid-term elections in November. In addition, US mid-term election political rhetoric has started to ramp up and is expected to escalate into October. The US Department of Commerce re...
- Carlo Besenius
- Stjepan Kalinic
2018 Q3 Global Investment Outlook & Strategy
The tailwinds for global GDP growth and demand for commodities, from expansionary US fiscal policy and domestic Chinese growth, limit the downside risk to emerging market equities from potential protectionist trade policies and a continuation of recent US$ strength. The consolidation phase in commodity prices in recent months has been constructive. We believe that the trade sanctions, and trade tariffs are not going to have a mitigatingimpact on the developments for commodity prices, on the cont...
- Carlo Besenius
- Stjepan Kalinic
052318 CGI Weekly Global Equities Strategy Update
Sell in May & Go away Now for 4 weeks that we have been heeding our clients to reduce global equities exposure and increase exposure towards US 10-Year Treasuries and towards commodities and Oil (WTI, we are keeping our $78 high price target for 2018 for now) in particular, to no surprise that the sell-side herd is following our advice slowly but surely and getting increasingly more negative on equities. Commodities’ prices (input prices) are on the rise, and we are forecasting b...
- Carlo Besenius
- Stjepan Kalinic
051418 CGI Weekly Global Equities Strategy Update
After the global economy had been slightly losing momentum in Q1, Q2 so far is off on a tear. Although monetary policy around the world is no longer getting easier, and with the US leading the world to higher interest rates, lower real wage growth and uncertainty stemming from a potential trade war and the geopolitical situation are the primary reasons behind the slowdown. Commodities’ prices (input prices) are on the rise, and we are forecasting besides Oil, that other commodities’ pri...
- Carlo Besenius
- Stjepan Kalinic
042318 CGI Global Fixed income Strategy Update
In the Americas, US bond yields rose sharply last week with 10-year Treasuries hitting a closing high of 2.96% on Friday; the highest since January 10th 2014 after reaching an intra-day high of 2.98%. The 2-year yield, meantime, hit 2.461%, its highest level since September 8th 2008. Fresh worries about inflation were the main driver of this move. Although the Fed Beige Book reported that price gains were seen as moderate, the Philadelphia Fed Business survey was much less ben...
- Carlo Besenius
- Stjepan Kalinic
Q2 2018 Global Investment Outlook & Strategy
The global economy is accelerating, however affected by geo-political distress, will decelerate in 2H 2018. The tailwinds for global GDP growth and demand for commodities, from expansionary US fiscal policy and domestic Chinese growth, limit thedownside risk to emerging market equities from potential protectionist trade policies and a continuation of recent US$ strength.Globally, equities are getting expensive, with US equities currently representing the highest valuation risk, in spite of tailw...
- Carlo Besenius
- Stjepan Kalinic
031918 CGI Weekly Global Equities Strategy Update
In Europe, Olaf Scholz, German Finance Minister is "seriously concerned" abouta trade stand-off with the US, and that free trade is being put at risk, and thatprotectionism is not the answer to the difficulties of our time. The situation isserious, and that Germany would continue talks to dissuade the US from imposingplanned punitive steel and aluminum tariffs.”Economic growth in the UK will remain at the bottom of the G7 group ofadvanced countries until at least the end of the decade, the Briti...
- Carlo Besenius
- Stjepan Kalinic
031518 CGI FX & Commodities Outlook
The US political circus show seems to have many rings, with plenty of action to occupy the spectators in each one. Around lunchtime in New York, it was reported by CNBC that President Donald Trump plans to name Larry Kudlow as his top economic advisor to replace Gary Cohn, who left the White House earlier this month amid disagreements about tariffs on steel and aluminum imports. Separately, it was reported by the New York Times that that Attorney General Jeff Sessions is reviewing a recommend...
- Carlo Besenius
- Stjepan Kalinic
031318 CGI Weekly Global Equities Strategy Update
Global macro & geo-political commentary Financial Markets have been somewhat stalling since mid February. Investors are struggling to connect the political hype with the visible changes in the hard data. As we pointed out in prior reports, leading indicators such as the Baltic Dry Index, and PMI data have shown that Q1 has been softening globally. Is this purely related to seasonal adjustments, or should investors brace themselves for global growth to abate versus expectations? The ...
- Carlo Besenius
- Stjepan Kalinic
030518 CGI Weekly Global Equities Strategy Update
In Asia, China aims to expand its economy by around 6.5% this year, the same as in 2017, while pressing ahead with its campaign to reduce risks in the financial system, Premier Li Keqiang said today. The goal was kept unchanged even though the economy grew 6.9% last year and exceeded the government's target. China has cut its budget deficit target for the first time since 2012, suggesting Beijing will be more watchful of fiscal spending while not tapping the brakes so hard that it risks a sharpe...
- Carlo Besenius
- Stjepan Kalinic
022618 CGI Weekly Global Equities Strategy Update
In Asia, Chinese economic growth will moderate, mostly due to slightly weaker domestic demand as authorities continue enforcing financial deleveraging via tighter financial regulations, although the deceleration will be only gradual and managed by the government. Latest consensus forecast is that China’s economy will grow 6.5% in 2018, which is unchanged from last month’s forecast, and by 6,3% in 2019. Economic indicators suggest the economy continued to fire on all cylinders at the outset of...
- Carlo Besenius
- Stjepan Kalinic
022318 CGI FX & Commodities Outlook
The worldwide economy keeps expanding at its fastest rate since 2011, the largest sources of demand will continue to be from Asia. Recent research shows China and India alone will consume 30% of world energy production. For 2018 and 2019, we have Chinese growth to continue to grow at 6-7%. Two weeks ago the World Bank has forecast prices to increase modestly in 2018 for almost all energy and non-energy commodities, with the exception of fertilizers, metals and minerals. The World Bank now sees ...
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