Latest from BCA Research

Concerns about the savings rate’s sustainability ease after adjusting for retirements and capital gains. The US economy continues to grow at a pace that is neither too hot nor too cold and investors should remain fully invested in risk assets.

Alternative for Germany’s election win in the state of Saxony-Anhalt is overrated.

Strong second quarter earnings suggest that the AI story is intact. Buoyed in part by this strength, tech stocks have recoupled with healthy fundamentals after a late-July swoon, posting solid August gains. We continue to see upside for the S&P 500, favoring the cyclical and AI exposure of tech, materials, and industrials. But rising bond yields remain the dominant headwind. 

Special Report

Real Assets remain underweight in investor portfolios, a gap the 2020s bond bear market has exposed. We provide specifics on constructing a portfolio that supplies more than diversification, it delivers return. The specific weightings may not fit every investor, but the three core principles behind them can.

Special Report

Europe’s earnings recovery is increasingly difficult to dismiss. Margins, ROE, ROIC, and capital efficiency have all improved, while banks have re-emerged as an earnings engine. Cyclical conditions remain supportive, and the structural picture continues to improve: higher investment, improving productivity, and EU reforms could give the recovery staying power.

Special Report

We propose a unified framework for predicting the direction of short-term interest rates and long-term bond yields that brings together three approaches: 1) the saving-investment approach; 2) the Taylor rule approach; and 3) the portfolio balance approach. Our analysis suggests that bond yields in the US and many other countries have increased mainly because of a higher neutral interest rate and a larger term premium. Given the risk of a further rise in inflation expectations, investors should overweight inflation-linked bonds.

There is no evidence that there is a run on US government bonds. All the data at our disposal, and the curated views of our bond specialists, suggest that the US bond market may have 99 problems, but a coordinated run on its safe haven status is not one. 

The yen's next leg isn't a fiscal story, it's an inflation one, and the BoJ is about to admit it. We lay out why a September pivot sends USD/JPY toward 99, and why global risk assets won't pay the price.

Special Report

China’s manufacturing edge should endure in the next few years. AI will challenge the country’s advantage in some industries, but geopolitics and weakening productive investment pose greater threats to sustaining China’s industrial leadership.