Deep restructurings in the German chemical and auto sectors could pose severe tests for company managements and governance structures.

Germany has experienced a prolonged industrial downturn, with industrial production dropping 20% since its peak in 2017. The crisis, in our view, is structural, with overcapacity, high labor and energy costs, and falling productivity often cited by managements as reducing competitiveness versus global peers. In our view, unprecedented restructurings are needed, but will likely be very difficult to implement, given the strength of local trade unions and complex...

The digital policy trail indicates important shifts in policy emphasis—and resulting investment takeaways.

Last month, China held its latest “third plenary” meeting for 2024, setting long-term strategic priorities with the potential to shape China’s economy and equity markets. Drawing on large language models and proprietary policy data capabilities,¹ we took the opportunity to identify potential investable equity themes from the “digital trail” tied to the meeting, progress in policy execution and new measures:

New Productivity, Quality

The Fed’s dovish shift in focus from inflation control to labor market weakness marks an important inflection point for asset allocators.

The annual Jackson Hole Economic Policy Symposium provided a stage for the U.S. Federal Reserve to signal to the world the central bank’s policy approach for the remainder of the year. Chair Jerome Powell’s speech, delivered in Wyoming last week, was decidedly dovish, laying the path for interest rate cuts to begin in September. Recent weakening macroeconomic data and payrolls, as well as the (short-lived) market turmoil in early August sparked by U.S. ...