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 ECB is now firmly in easing mode, even if it refuses to pre-commit to a specific rate path. What does this data dependency mean for the euro and European yields?
The US economy remains on a path towards a recession, most likely starting in late 2024 or early 2025. For now, investors should maintain a benchmark allocation to equities, but employ a barbell strategy of overweighting defensives and materials.
A short insight on the ECB and near-term implications for European asset markets.
The long-term winners from the generative-AI gold rush are unlikely to be the ‘picks and shovels’ stock Nvidia or the overvalued US superstars of Web 2.0. We discuss the structural investment implications. Plus: time to go tactically overweight global consumer discretionary (RXI).
MORENA has once again swept the Mexican election: Claudia Sheinbaum will be president, with little to no constraint in Congress. All in all, Mexican politics will remain stable and overall supportive of markets. In the medium term, fiscal spending will return to conservatism and the constitutional reforms will lead to mixed fiscal and economic repercussions. In the long term, however, fiscal and institutional risks will rise. We advise investors to remain overweight Mexican risk assets relative to EM in cyclical and structural time horizons, but prepare for Mexican markets to sell off in absolute and relative terms in the next couple of months.
MacroQuant sees significant downside risks to stocks over a 1-to-3 month horizon and suggests increasing allocation to long-term bonds. The model favours defensive equity sectors but is also hedging its bets by overweighting materials.
The large buildup in Chinese households’ savings deposits is unlikely to fuel consumption. Poor outlooks on labor market conditions, income, and households’ unwillingness to borrow will hinder consumption through the rest of 2024.
The signs of an approaching recession are starting to emerge. We will turn tactically defensive once they all fall into place.