Latest from BCA Research
Both the Chinese and US central banks will likely take policy actions in the coming weeks. What is the potential impact of a mortgage rate cut on China’s household consumption and the broader economy? Will the anticipated Fed easing cycle further lift the RMB exchange rate versus the US dollar?
The undercurrents of global financial markets signal deteriorating global growth conditions. There is little cash on the sidelines in the US, the Euro Area, and Japan. If the budding bear market resembles the 2000-2003 one, EM stock prices are unlikely to outperform global equities in the initial leg but could outperform in the latter stage of the global selloff.
The economy is not in a recession, and the Fed is not behind the curve. A 50 bp rate cut at the September meeting is unlikely, but 25 bp is certain. However, economic growth is slowing, and a recession at the end of the year is still the most likely outcome. The S&P 500 earnings are projected to grow, but our model predicts that the growth rate will roll over. The S&P 500 remains expensive and crowded, but the most extreme technical positioning across sectors has unwound. We recommend lowering portfolio beta with defensive sectors, and under-weighing Tech, and Consumer Discretionary.
Crucial leading indicators of the global and European economies continue to deteriorate. How should investors position their European portfolios to benefit from these trends?
This report looks at the latest developments in G10 economies and implications for bond and FX market strategy.
This morning's employment report, particularly the downward revisions to prior months, strengthens our conviction that the US economy is headed for recession.
Central bank gold buying is likely to remain a tailwind for the yellow metal, supporting a continuation of the rally over the coming years. We maintain a long strategic position in COMEX gold and recommend an overweight to the yellow metal within commodity portfolios.
