CoreMacro
BCA’s flagship global macro and investment strategy platform, helping investors anticipate regime shifts, connect signals across regions and asset classes, and navigate the world’s most difficult macro questions.
The odds have risen that we have reached a “Metaverse Moment” – a situation where investors punish AI companies for increasing capex. This warrants greater caution towards AI stocks specifically, and the broader S&P 500 more generally.
China’s economy is weakening across the board as global risk-off hits equities. With housing conditions worsening and exports contracting—a perfect storm—Beijing faces mounting pressure to deliver stronger, housing-focused stimulus.
Many key equity indexes have failed to break above major resistance levels, while risky segments have begun to crack. Altogether, this suggests that a major peak in risk assets has probably been made. Short the MSCI EM stock index with a stop loss at 1470.
This report revisits China’s property market through both cyclical and structural lenses, assesses the likely policy responses, and evaluates their investment implications.
Indian stocks have further downside in absolute terms as profits disappoint. Their underperformance versus the EM equity benchmark, however, is late, which warrants a shift from underweight to neutral allocation.
Disparities between households and between companies’ earnings and equity performance are widening, but the overall status quo remains in place. We reiterate our neutral asset class recommendations while watching for early signs of whether activity might break out or break down.
The greater risk to the world economy in 2026-27 is not that a recession triggers a market crash, but that a market crash triggers a recession. This is because a market crash will destroy the wealth that is funding the crucial marginal spending of 2.5 million excess American retirees. Plus, a new tactical trade is: Overweight Switzerland (SMI) versus UK (FTSE 100).
