Equity Research
Global Strategy Paper: Bear Market Anatomy – the path and shape of the bear market
Most equities have entered (or are on the cusp of) a bear market, not all of which are the same. The type of bear market has some bearing on the triggers, timing and speed of the recovery. We would argue that we are in an event-driven bear market (triggered by tariffs). However, it could easily morph into a cyclical bear market given growing recession risk. The average falls of around 30% are similar for both event-driven and cyclical bear markets, while they differ in terms of duration with event-driven downturns being shorter with a faster recovery profile.
8 April 2025 | Research | Portfolio Strategy - Peter Oppenheimer and others
WEBCAST: Bear Market Anatomy – the path and shape of the bear market
10 Apr 2025 | 9:30am NY | 2:30pm LN
With Peter Oppenheimer and Chris Hussey
Global Markets Comment: After the Tariffs—Still Room to Price Recession
If the tariffs go into effect as announced, our US economists will likely move to a recession baseline forecast. Despite the large shift already in cyclical pricing, our "growth benchmarking" exercises suggest that the market is still not priced for an average recession.
8 April 2025 | Research | Economics - Dominic Wilson and others
We are lowering our 2025 Q4/Q4 GDP growth forecast to 0.5% and raising our 12-month recession probability from 35% to 45% because of tighter financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty. This baseline forecast still rests on our standing assumption that the effective US tariff rate will rise by 15pp in total, which would now require a large reduction in the tariffs scheduled to take effect on April 9. If these tariffs take effect, we expect to change our forecast to a recession.
6 April 2025 | Research | Economics - Jan Hatzius, David Mericle, Alec Phillips, Ronnie Walker and others
Research Unplugged: Macro Update: Countdown to Recession
With Alec Phillips, Jan Hatzius, Dominic Wilson, Kamakshya Trivedi, David Kostin, Lotfi Karoui and Allison Nathan
China: Incremental GDP impact from potentially another 50% Trump tariff
China's retaliatory tariff of 34% on US goods, a response to US “reciprocal” tariffs, triggered a threat from President Trump to impose an additional 50% tariff if China does not withdraw its retaliatory tariff. Further statements from the Chinese government point to escalating trade tensions. Our analysis suggests an initial 50% tariff (which is roughly how much President Trump has imposed on China so far this year) would decrease Chinese GDP by 1.5pp. A second 50% tariff, however, would have a diminished impact, reducing GDP by only another 0.9pp.
8 April 2025 | Research | Economics - Andrew Tilton and others
Also see: China: PBoC allows more flexibility on USD/CNY fixing on tariff escalation
Tariffs and the Dollar: Why We Flipped Our View
We have made a major shift in our Dollar view after seeing the developments of the last few weeks and rethinking the likely implications of these policy changes. We now expect recent Dollar weakness to persist, particularly in DXY terms. First, the combination of an unnecessary trade war and other uncertainty-raising policies is severely eroding consumer and business confidence. Second, negative trends in US governance and institutions are eroding the appeal of US assets for foreign investors. Third, rudimentary calculations and a constant back-and-forth makes it difficult for investors to price outcomes other than high uncertainty.
8 April 2025 | Research | Economics - Michael Cahill and others
Replay: The USD Outlook
Global Markets Daily: Playing Defense in Credit
We investigate the risk-reward from going up in quality and keeping duration high relative to shortening duration and going down in quality. We find that adding spread via duration is preferable vs. lower quality names given the risks skew towards spread decompression.
8 April 2025 | Research | Economics - Shamshad Ali
Also see: Credit Notes: Before Day 3: Steady microstructure (for now), but lingering spread widening
President Trump announced a “reciprocal” tariff plan on April 2. After incorporating the newly released product list, we estimate that the “reciprocal” tariff package would raise the US effective tariff rate by about 11.5pp if the package takes full effect on April 9. This and other tariffs announced since the beginning of the year would together push the US effective tariff rate from 2.5% to over 20%, and potential sectoral tariffs would pose additional upside risks to this estimate.
8 April 2025 | Research | Economics - Jan Hatzius and others
EQUITY IMPLICATIONS
- Asia
- Europe
- Americas
The impact of tariffs on commodity demand is uncertain, but we expect some level of inventory chain destocking and a reduction in metal consumption over the next 6 months and therefore a negative impact on commodity prices to a certain degree. Notably, Chinese steel mills and manufacturing companies we met with on our recent China M&M trip expressed concern to us about the impact to demand and exports from US tariffs. Looking at prior commodity down cycles (2008, 2015, 2018, 2020), metals with tighter fundamentals and companies with FCF and strong balance sheets outperform during a downturn, and this time we see these as base metals over the bulks based on supply/demand fundamentals, and companies such as the major diversified miners RIO, BHP and S32, and pure plays BSL & SFR (upgrade to Buy).
BUY: Sandfire Resources | Rio Tinto Ltd. | BHP Group Ltd. | South32 Ltd. | BlueScope Steel | Champion Iron Ltd. | Iluka Resources
SELL: Mineral Resources | New Hope Corp.
NEUTRAL: Fortescue Metals Group | Coronado Global Resources | Whitehave Coal Ltd. | Deterra Royalties Ltd.
Co-head, APAC Natural Resources & Clean Energy | Sydney
8 Apr 2025 | Research | Equity - Paul Young and others
- Company HighlightsBYD Co. (002594.SZ/1211.HK): 1Q25 pre-announced net profit beat GSe by 25% at mid-point; Buy8 Apr 2025 | 3:36pm| 8pg| Research | Equity-Tina Hou and othersEli Lilly & Co. (LLY): Compelling Entry Point Into A Secular Growth Leader for Uncertain Times; Assuming Coverage with a Buy8 Apr 2025 | 2:23pm| 33pg| Research | Equity-Asad Haider, CFA and othersCoupang Inc. (CPNG): Takeaways from FLC merchants interviews; Despite promotions, limited ST FLC headwind and operating leverage to kick in earlier than expected8 Apr 2025 | 7:15pm| 15pg| Research | Equity-Eric Cha and othersJohnson & Johnson (JNJ): Lean Into The Strengthening Pharma Franchise Of Defensive Bellwether; Assuming Coverage with a Buy8 Apr 2025 | 2:24pm| 29pg| Research | Equity-Asad Haider, CFA and othersViking Therapeutics Inc. (VKTX): Hyper Competitive Obesity Market with High Barriers to Entry Awaits VK2735, Initiate w/ Neutral at $30 PT8 Apr 2025 | 2:17pm| 81pg| Research | Equity-Richard Law, Ph.D. and othersMerck & Co. (MRK): Conditions In Place for a Stock Recovery & Animal Health Business Now Effectively A Free Option: Assuming Coverage With a Buy8 Apr 2025 | 2:23pm| 24pg| Research | Equity-Asad Haider, CFA and others
- Industry HighlightsChina Insurance: Implications as NFRA raises equity investment cap8 Apr 2025 | 9:23pm| 8pg| Research | Equity-Thomas Wang and othersAmericas Transportation: Airlines: Framing the downside for US airlines as demand slows; upgrade SKYW to Buy; downgrade AAL to Sell8 Apr 2025 | 10:02am| 18pg| Research | Equity-Catherine O'Brien and othersEurope Internet & Media: Framing downside risk from weaker macro and trimming estimates for US-exposed stocks9 Apr 2025 | 4:47am| 30pg| Research | Equity-Lisa Yang and othersAmericas Healthcare: Pharmaceuticals: Navigating Uncharted Waters: Assuming coverage of LLY, JNJ, MRK at Buy, and ABBV, BMY, PFE at Neutral8 Apr 2025 | 5:00pm| 29pg| Research | Equity-Asad Haider, CFA and othersGlobal Healthcare: Pharmaceuticals: The State of Play In Vaccine Stocks: Soft Commercial Trends; Lingering Policy Uncertainty8 Apr 2025 | 2:33pm| 32pg| Research | Equity-Asad Haider, CFA and othersChina Education: Feb-Q Preview: Trim GSe on overseas study headwind and learning device competition; Stay Buy on TAL/EDU8 Apr 2025 | 4:44pm| 16pg| Research | Equity-Timothy Zhao and others
- PORTFOLIO STRATEGYAsian Equity Perspectives: Higher tariffs, lower earnings, partly priced5 Apr 2025 | 11:32pm| 12pg| Research | Portfolio Strategy-Timothy Moe, CFA and othersGOAL Kickstart: Risk Appetite collapse - dissecting the sell-off post the US tariff announcement7 Apr 2025 | 1:30pm| 29pg| Research | Portfolio Strategy-Andrea Ferrario and othersUS Weekly Kickstart: What to watch during the 1Q 2025 earnings season5 Apr 2025 | 5:59am| 27pg| Research | Portfolio Strategy-David J. Kostin and others
- OPTIONSMacro Catalyst Reactions (8-Apr-2025)8 Apr 2025 | 10:08pm| 1pg| Research | Options-John MarshallCross-asset Dislocations (8-Apr-2025)8 Apr 2025 | 8:17pm| 1pg| Research | Options-John MarshallOptimal Overwrites this week (07-Apr-25)8 Apr 2025 | 12:53am| 17pg| Research | Options-Rohith Medarametla and others
- All
- Upgrades
- Downgrades
- Initiations
- CL Adds
- CL Removes
Rating changes (last 24 hrs)
EPS changes (10% or more, last 24 hrs)
Price target changes (10% or more, last 24 hrs)
European Consumer Staples and Retail Conference
13-14 May 2025 | London
Register
Global Staples Forum
13 May 2025 | New York
Register
Electrify Europe: Utilities and Clean Energy Conference
19-20 May 2025 | London
Register
TechNet China
21-22 May 2025 | The Portman Ritz-Carlton, Shanghai
Register