Latest from BCA Research

As the odds of a Trump victory increase, there are indications that the “Trump trade” has commenced in global financial markets, with negative short-term implications for EM. In short, the US dollar will strengthen, and US bond yields will rise in the lead-up to and after the election if Trump wins. In response, EM countries’ currencies will depreciate, and their fixed-income and equity markets will suffer over the coming months.

The semiconductor industry has decoupled: Demand for AI and advanced chips is booming, while the outlook for legacy and non-AI semiconductors is downbeat. We upgrade the US semiconductors to overweight on a tactical investment horizon as Nvidia’s good fortunes will drive the performance of the entire industry. We also reiterate overweight in Diversified Financials and Capital Markets as the resurgence in capital market activity is still in its early innings and will continue to drive the outperformance of the nation’s largest investment banks.

This Insight looks at the likely direction of bond yields and the dollar, from the lens of money velocity.

This Insight looks at the likely direction of bond yields and the dollar, from the lens of money velocity.

In August 2007, Ed Leamer famously presented a paper entitled Housing IS the Business Cycle at the Jackson Hole symposium. I was reminded of this paper after seeing today's US housing data.

Yesterday, the ECB solidified its recent dovish tilt in response to weaker growth and decreasing inflationary pressures. It is now set to cut rates 25bps each meeting. How low will the ECB deposit rate ultimately go and what does this imply for yields and the euro?

Earnings growth is expected to be strong enough to assuage investors' fears that recession is not yet imminent. Q3 earnings expectations have been revised downward over the past three months, and the bar for the beats has been lowered. Operating margins are also expected to expand.

Special Report

In this Special Report, Marko Papic, Chief Strategist of BCA Research’s GeoMacro Strategy, and Mathieu Savary, Chief Strategist of BCA Research’s European Investment Strategy, together argue that the conflict in Ukraine is already frozen, already losing support in the West, and is likely to taper off over the course of 2025. However, there is no easy alpha left to harvest from that conclusion, the market has already moved on. Some long-term investment opportunities remain in broad European assets.

Institutional investing is not as straightforward as picking the fastest horse. Infrastructure’s attraction as an investment stems from its diversification, specifically its feature as an inflation-hedge, cash flow stability, and scalability. This Primer lays the groundwork for integrating Infrastructure into the PMA framework.

We estimate where Treasury yields might go in a soft landing economic scenario.