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United States
Variant Perception’s US growth leading indicator ticked up, pointing to a steady outlook.
Euro Area
Fiscal austerity has decisively reversed since the pandemic, with budget deficits remaining near 3% of GDP.
Japan
Earnings for the Nikkei 225 rose above the trend channel in Q2.
Asia-Pacific
The Reserve Bank of Australia kept its policy rate unchanged at 4.35%, as expected. Governor Bullock maintained that rate cuts were not discussed, emphasizing that the bar for further tightening remains high unless inflation surprises to the upside.
China
China’s return on capital has been in a structural downtrend for both offshore and onshore listed nonfinancial companies, underscoring persistently weak corporate profitability.
Equities
Our Affine Stock-Bond Model, which simultaneously fits equity and bond risk premia, points to secularly low expected returns for the 60/40 portfolio over the coming decade.
Global Developments
Political polarization has risen around the globe over the past decade.
