U.S. Consumer Spending: A Positive Surprise!

U.S. retail sales in March popped higher, while February revisions were positive.

U.S. Consumer Spending

After hibernating this winter, U.S. consumers appear to be opening their wallets again. March retail sales data were strong across the board – the only exceptions were spending on gasoline and electronics, which contracted month-over-month.

Fundamentals for consumer spending remain solid: the consumer deleveraging cycle is very mature, policy uncertainty has finally subsided, business confidence is improving, and the wealth effect is still positive, despite equity market volatility in recent weeks. Most importantly, job prospects are gradually improving and this is beginning to be reflected in overall consumer confidence, a pre-condition for more vigorous spending.

Overall, we expect the U.S. economy is on track for 3% growth or better over the next year.

Brazilian Banks: Not Out Of The Woods Yet

The carnage in Brazilian assets over the past three years has not spared the country’s banks. According to our EM strategists, bank stocks in Brazil have not yet priced in the economy’s most likely path toward recession and the ensuing negative eff … [More.]

Is A Bubble Forming In U.S. Equities?

According to our U.S. Investment Strategy service, bubble concerns are premature. Today's valuations do not resemble the excesses that were inescapably apparent in the 1999-2000 equity bubble. Back then, large-cap tech stocks, achieved … [More.]

What To Do With Chinese Stocks?

The shift in policy stance should help the economy and the Chinese stock market to stabilize. Chinese stocks, both in the domestic and the investable markets, have remained stuck in a broad trading range that has been in place since 2012. The … [More.]

The Loonie Gets No Respect

The Canadian dollar got hit last week as BoC Governor Stephen Poloz’s comments were seen to be dovish. Poloz said that he could not rule out interest rate cuts. However, he said that it would first require the balance of risks for the i … [More.]