Latest from BCA Research

Investors should worry much less about a US or global recession than they should worry about the bubble in anything AI-related. This means staying overweight bonds and the JPY, underweight US tech and quasi-tech, and underweight the US. Plus: SGD/USD is vulnerable to reversal, while copper versus gold can rebound.

Oil prices failed to hold onto their recent rebound. They slid on Tuesday as demand con-cerns resurfaced. This dynamic is the latest iteration of a tug-of-war that has kept oil prices in a trading range since H2 2023. Bearish demand concerns are enforcing an upper limit on the price of crude while bullish supply risks are maintaining a floor.

Our negative stance on European growth and assets is not devoid of risks. To gauge whether these risks warrant upgrading our growth outlook, we monitor Sweden closely. So, what is the current message from this Nordic economy?

Special Report

Favor Health Care and Utilities for defensive positioning amid economic slowdown and volatility as the presidential election approaches. A Republican Sweep favors Real Estate and Materials, while the second most likely outcome, Democrat gridlock, favors Health Care, and Information Technology.

The great US labor market shortage is over. Labor demand will likely fall short of supply by the end of this year, causing unemployment to soar. Neither fiscal nor monetary policy will be able to prevent the coming recession. Investors should underweight stocks and overweight Treasuries.

Special Report

China has become less reliant on exports to advanced economies, and its products have successfully penetrated developing economies. Exports to the US make up 3% of Chinese GDP, while exports to all developing economies account for 10% of its GDP. China’s trade pivot from advanced to developing economies has economic, political, and geopolitical ramifications.

Special Report

In this Special Report, we assess the impact of monetary policy tightening on major economies. Interest rate sensitive GDP already slowed significantly in response to the aggressive rate hiking cycle. Despite the beginning of policy easing, our forward-looking indicators suggest monetary policy will continue to weigh on the economy.

Private Equity Secondaries have grown but so have their opportunities. Near-term opportunities will be fertile while underlying trends will sustain the asset class in the long-term. Private Equity investors should be greedy.

Investors should buy protection against further volatility. The shakeup in early August was a taste of things to come. The US election is a pivotal moment in modern history that will drive up uncertainty, while other countries take advantage of US division and distraction.

Special Report

The US fiscal outlook is more unappetizing than it was before the pandemic, but we are not convinced that a difficult day of reckoning awaits. A Treasury market crisis is conceivable, but it is far from inevitable.