GeoMacro

The bond market has paused its selloff thanks to a revolt by the Republicans in the House of Representatives against much of President Trump’s fiscal agenda. Gone are the lofty projections of the expanded deficit and we are now looking at merely the 2017 tax cuts being extended. This is positive for bonds, but by extension of the relationship also somewhat positive for equities. The US economy, effectively, does not need any more growth and certainly does not need any more inflation. Our thesis that we are at peak fiscal is therefore in effect.

In this report, we reassess our bullish stance on crypto from early 2023, following Bitcoin’s recent all-time highs. While institutional adoption is broadening, there are also signs of excessive exuberance, speculation, and optimism. Given these conditions, a near-term correction appears likely. We are booking profits and will look to re-enter the market at $75,000.

We revisit our view on the “fiscal gravy train” as well as President Trump’s negotiating style. We re-print parts of our March 2024 net assessment, particularly for the benefit of our new clients who have joined us at BCA Research. Our analysis of President Trump’s first term is our guide into how the White House will negotiate future trade wars and skirmishes.

Trump’s territorial ambitions threaten to deliver negative surprises and “black swan” risks during his four-year term. Military conflicts on the Mexican border raise the biggest risk, but US intervention in Panama can never be ruled out. The investment impact will be limited unless the trans-Atlantic alliance is damaged.

Special Report

Argentina is entering a regime shift from the traditional short boom-bust cycles of the past 50 years. Profound structural reforms will result in a productivity boom, leading to a more durable economic expansion while keeping with the disinflation trend. Authorities will likely lift capital and currency controls in the second quarter of this year. All in all, odds are that Argentinian assets have entered a multi-year bull market.

Special Report

China barely hit its growth target in 2024 by shifting back to its old model of exports, racking up a record trade surplus with the world – right as Donald Trump walks back into the White House. Tariffs will elicit larger fiscal stimulus even as China rolls out innovations such as DeepSeek to meet its 2025 industrial goals, creating a volatile mix this year.

Special Report

Should investors take seriously the possibility of Canada becoming part of the US? We strongly argue that such a union is not in the cards. Conservative America will fight it tooth and nail, despite President Donald Trump’s suggestions. There is no mythical “conservative Canada.” The entire country is as liberal as the state of Vermont, with Alberta only as conservative as Minnesota. However, in the very long term, the probability is not zero.

Special Report

Simple games allow us to model several of the Trump administration’s most disruptive policies in 2025. We find that markets face an increase in volatility as Congress expands the budget, Trump implements tariffs on the world, China retaliates, and Taiwan tensions persist. A ceasefire in Ukraine is a marginally positive outcome for Europe, although it is not a long-term peace treaty.

Special Report

In this Special Report, we share our “thoughts from the field,” gathered during a week of panels and conversations at the World Economic Forum in Davos. Our main takeaways include China’s rising global presence (despite its deceptive absence at the forum), the rising consensus on AI investment as the new corporate best practice, mounting stakes in the AI race, and the global shift toward MAGA-branded ideology as President Trump enters his second term. We also reflect on the surprising lack of geopolitical focus in the discussions and the forum’s broader role in the global geopolitical landscape.

Special Report

There is no better way to gauge the macro policies of the new US administration than being privy to President Donald Trump’s discussions with the new Treasury Secretary, Scott Bessent. While we do not have inside information, we have put the pieces of the puzzle together to help clients see the big picture. This report presents our take on a hypothetical conversation between President Trump and Scott Bessent that led to the latter’s appointment as Treasury secretary.