Business cycle

The Conference Board Leading Economic Index® (LEI) for Japan Decreased

Friday, August 7, 2020 - 3:30pm

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle.

Key Points: 
  • The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle.
  • The leading and coincident economic indexes are essentially composite averages of several individual leading or coincident indicators.
  • For more information about The Conference Board global business cycle indicators, click here .
  • The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead.

The Conference Board Leading Economic Index® (LEI) for South Korea Increased

Thursday, August 6, 2020 - 3:30pm

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle.

Key Points: 
  • The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle.
  • The leading and coincident economic indexes are essentially composite averages of several individual leading or coincident indicators.
  • For more information about The Conference Board global business cycle indicators, click here .
  • The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead.

Redfin Survey: 25% of Homebuyers Are Moving--Or Moving Sooner Than Planned--Because of the Pandemic

Wednesday, August 5, 2020 - 1:01pm

"Somewhat counterintuitively, the coronavirus-driven recession is propping up the housing market," said Redfin chief economist Daryl Fairweather.

Key Points: 
  • "Somewhat counterintuitively, the coronavirus-driven recession is propping up the housing market," said Redfin chief economist Daryl Fairweather.
  • Sixteen percent of respondents said the pandemic has caused them to want to move and 15% said it has caused them to move sooner than originally planned.
  • Six percent of respondents chose both options, which results in a total of 25% of homebuyers who said the pandemic has caused them to want to move and/or speed up their moving timeline.
  • Low mortgage rates and spending more time at home are driving forces for people who are moving for pandemic-related reasons.

Insight Investment: COVID-19 Could Trigger the End of the USD Bull Market

Wednesday, August 5, 2020 - 2:00pm

This is the view in new research, COVID-19: The Trigger That Ends the US Bull Market?

Key Points: 
  • This is the view in new research, COVID-19: The Trigger That Ends the US Bull Market?
  • As the global economy faces another severe downturn, caused by Covid-19, so the USD has moved to historic highs.
  • Emerging market debt has witnessed a 60% increase in leverage, a sharp contrast to early 2000 when emerging market leverage was declining.
  • Insight North America (INA) is part of Insight or Insight Investment, the corporate brand for certain asset management companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited, and Insight Investment International Limited.

Newport LLC, an Advisory Firm to Middle Market Companies, Releases Insights on How to Reshape Your Business Strategy

Saturday, August 1, 2020 - 5:00am

A prolonged recession will strain our financial and business system; the "V" recovery may have been an overly optimistic projection.

Key Points: 
  • A prolonged recession will strain our financial and business system; the "V" recovery may have been an overly optimistic projection.
  • The National Center for the Middle Market reports that middle-market business leaders are striking a cautious path forward in unprecedented times.
  • Business confidence is now significantly lower than at the beginning of 2020, yet these same business leaders do expect economic conditions to improve.
  • While the principles of a strategy usually remain fixed, the actions, tactics, and details of the strategy must be adaptable.

Fraser Institute News Release: Business investment in Canada propped up by housing in B.C. and Ontario; sharply declines in AB and SK; Quebec, Maritimes consistent laggards

Tuesday, July 28, 2020 - 10:00am

The study measures growth in business investment at the provincial level from 1990 to 2014 and from 2014 to 2018, the most recent year of comparable data.

Key Points: 
  • The study measures growth in business investment at the provincial level from 1990 to 2014 and from 2014 to 2018, the most recent year of comparable data.
  • Much of B.C.s investment growth, however, is the result of the provinces strong construction and real estate sectors.
  • While the investment laggards are still lagging, even the previous bright spots in Canadas business investment landscape are currently dim, Globerman said.
  • Given how important business investment will be post-recession, policymakers should pursue policies, including implementing regulatory reform and competitive tax rates, that are known to attract investment.

The Conference Board Leading Economic Index® (LEI) for India Increased

Monday, July 27, 2020 - 2:00pm

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle.

Key Points: 
  • The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle.
  • The leading and coincident economic indexes are essentially composite averages of several individual leading or coincident indicators.
  • For more information about The Conference Board global business cycle indicators, click here .
  • The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead.

Luis de Guindos: Interview with El Independiente

Monday, July 27, 2020 - 12:03am

INTERVIEWInterview with El IndependienteInterview with Luis de Guindos, Vice-President of the ECB, conducted by Casimiro García Abadillo on 21 July 2020 and published on 26 July 2020 This is the first time that a plan of this kind will be funded by mutualised debt.

Key Points: 


INTERVIEW

Interview with El Independiente

    Interview with Luis de Guindos, Vice-President of the ECB, conducted by Casimiro García Abadillo on 21 July 2020 and published on 26 July 2020

      • This is the first time that a plan of this kind will be funded by mutualised debt.
      • The markets reacted to the agreement with relief, although they had already priced it in to some extent.
      • Will the 750billion be enough to deal with an economic downturn as sharp as the one brought about by the coronavirus (COVID-19)?
      • We must bear in mind that this fund comes on top of the plans that have been implemented by each Member State.
      • The European Commissions own calculations show that the national stimulus packages alone are equal to 8% of European GDP.
      • How is it going to affect the Member States that hope to access the grants?
      • Will the agreement mean putting the brakes on the repeal of the Spanish labour market reforms that were introduced by Mariano Rajoys government?
      • We provided banks with liquidity at favourable terms in order to prevent a credit crunch for businesses and households.
      • Ambitious monetary policy measures have been implemented in parallel to fiscal policies that have prioritised support to businesses and households.
      • But, later on, when the economy recovers, it will be necessary to rebalance the deficit and start to reduce the debt.
      • That is the only way to ensure that the welfare state is sustainable over the medium and long term.

    Luis de Guindos: Interview with El Independiente

    Sunday, July 26, 2020 - 4:00pm

    INTERVIEWInterview with El IndependienteInterview with Luis de Guindos, Vice-President of the ECB, conducted by Casimiro García Abadillo on 21 July 2020 and published on 26 July 2020 This is the first time that a plan of this kind will be funded by mutualised debt.

    Key Points: 


    INTERVIEW

    Interview with El Independiente

      Interview with Luis de Guindos, Vice-President of the ECB, conducted by Casimiro García Abadillo on 21 July 2020 and published on 26 July 2020

        • This is the first time that a plan of this kind will be funded by mutualised debt.
        • The markets reacted to the agreement with relief, although they had already priced it in to some extent.
        • Will the 750billion be enough to deal with an economic downturn as sharp as the one brought about by the coronavirus (COVID-19)?
        • We must bear in mind that this fund comes on top of the plans that have been implemented by each Member State.
        • The European Commissions own calculations show that the national stimulus packages alone are equal to 8% of European GDP.
        • How is it going to affect the Member States that hope to access the grants?
        • Will the agreement mean putting the brakes on the repeal of the Spanish labour market reforms that were introduced by Mariano Rajoys government?
        • We provided banks with liquidity at favourable terms in order to prevent a credit crunch for businesses and households.
        • Ambitious monetary policy measures have been implemented in parallel to fiscal policies that have prioritised support to businesses and households.
        • But, later on, when the economy recovers, it will be necessary to rebalance the deficit and start to reduce the debt.
        • That is the only way to ensure that the welfare state is sustainable over the medium and long term.

      Luis de Guindos: Building the Financial System of the 21st Century

      Thursday, July 23, 2020 - 12:04am

      SPEECH Building the Financial System of the 21st CenturySpeech by Luis de Guindos, Vice-President of the ECB, at the 18th annual symposium on “Building the Financial System of the 21st Century: an Agenda for Europe and the United States” organised by the Program on International Financial Systems and Harvard Law School (by videoconference) In both the euro area and the United States, the pandemic and the related lockdown measures have led to stark economic contractions.

      Key Points: 


      SPEECH

      Building the Financial System of the 21st Century

        Speech by Luis de Guindos, Vice-President of the ECB, at the 18th annual symposium on “Building the Financial System of the 21st Century: an Agenda for Europe and the United States” organised by the Program on International Financial Systems and Harvard Law School (by videoconference)

          • In both the euro area and the United States, the pandemic and the related lockdown measures have led to stark economic contractions.
          • These contractions have been shaped by key structural differences between the two financial sectors, requiring differentiated policy responses.
          • Moreover, the shock is highlighting the importance of macroprudential policy in both the bank and non-bank financial sectors to safeguard a stable financial system.

        The financial sector in the wake of the pandemic crisis and the policy response

          • The financial system in the euro area is predominantly bank-based compared with the more market-based system in the United States.
          • In fact, more than half of funding to non-financial firms in the euro area is channelled through banks.
          • [1] At the same time, the euro area financial sector has increasingly begun to resemble its US counterpart over the past decade.
          • The non-bank financial sector has seen exceptional growth: total assets of the sector doubled from 24 trillion in 2009 to 48 trillion in 2019.
          • Thanks to the Basel III regulatory framework, banks entered this crisis with stronger capital and liquidity positions than they had before the global financial crisis.
          • Their improved resilience has been central in enabling banks to weather the initial strain of the pandemic shock and continue funding the real economy.
          • During this period, investment funds experienced exceptionally large outflows, similar in magnitude to those seen during the global financial crisis.
          • [2] Timely monetary, prudential and fiscal policy supported near-term financial stability, but could not prevent the pandemic crisis from exacerbating medium-term risks to financial stability, to which I will turn next.

        Looking ahead: challenges for the euro area banking sector

          • The banking sector has proven to be resilient in the initial phase of the pandemic stress.
          • But this is not to say that the sector will not face headwinds in the future.
          • Such a sharp deterioration in profitability adds to the structural challenges already facing the euro area banking sector.
          • The coronavirus pandemic could in fact represent an opportunity for the financial sector to adapt to this new environment more swiftly.

        Looking ahead: challenges for the non-bank financial sector

          • Turning to the non-bank financial sector, the early stages of the pandemic shock have shown how investment funds in particular can contribute to amplifying adverse market dynamics by increasing market volatility and price dislocations.
          • [4] In my view, the increasing importance of the non-bank financial sector in the financing of the euro area economy calls for a stronger macroprudential framework for the sector.
          • To date, the prudential policy framework for investment funds has primarily relied on ex-post liquidity management tools under asset managers.
          • Leverage may also amplify procyclicality in the investment fund sector as it is an important factor in investors redemption decisions.

        Conclusion