Latest from BCA Research

An acute shortage of AI hardware will support tech stocks into year-end. However, AI companies may need to ultimately generate $10 trillion per year in revenue to justify their capex. Barring a massive increase in productivity growth, this will be very difficult to achieve. Despite today’s Treasury announcement of upsized buyback operations, bond yields are likely to remain elevated over the coming months. Rising crack spreads have reduced the demand for crude, which is not encouraging for global growth. On the FX front, recent intervention to support the yen will probably be insufficient, but there is significant long-term upside for the currency.

The war in Iran and the energy shock are driving a reversal of Nordic fortunes: Sweden’s recovery is faltering just as Norway receives a welcome energy windfall. Favor Norwegian over Swedish equities and buy NOK/SEK. In rates, fade aggressive Riksbank hike expectations and downgrade Norwegian government bonds to neutral.

Q2 earnings confirm broad-based strength, but the bond market remains the key risk to equity multiples given today's positive stock/bond correlation regime. We close our tactical GDX long for a 16% gain, though we continue to view goldminers as a valuable structural hedge.

Special Report

The Hormuz crisis has exposed a structural vulnerability in China's petrochemical value chain. Going forward, Beijing will look to build greater supply security by scaling up coal-to-olefins capacity — a shift that creates a structural tailwind for coal prices and a structural headwind for oil.

Special Report

Four decades of robust stock market gains have positioned the equity wealth effect to play a larger role in the business cycle.

We are downgrading Brazilian equities from neutral to underweight and maintaining our underweights in Brazil's domestic bonds and sovereign credit within their respective EM portfolios. Go long Brazilian 5-year CDS as a short-term trade.

Special Report

In this report, Martin Barnes, BCA’s Emeritus Chief Economist, reflects on the rise in US government debt, dollar strength, and profit margin expansion that has occurred over the past 25 years. He argues that these trends are unsustainable and are bound to reverse within the next few years.

In this report, we explore opportunities in goldminer equities, AI infrastructure monetization, and Japan's tactical outperformance window.

Left-wing populism will likely prevail within the Democratic Party and inspire large tax hikes in 2029. But the US does not face a socialist takeover.

July’s CPI reading was low enough to keep the Fed on hold for now, but near-term upside inflation risks remain.