Latest from BCA Research

The Fed and ECB talked a good game as they redoubled their commitments to returning core inflation to 2% p.a. at Jackson Hole. However, their outmoded inflation-fighting playbooks do not address supply tightness in commodity and energy markets, which keeps inflation risk elevated. The proposed expansion of the BRICS states seeks to capitalize on these trends, and supports efforts to weaken the centrality of the USD in global trade. We remain long commodity exposure via ETFs to retain exposure to energy and metals producers and refiners.

We comment on Jay Powell’s Jackson Hole speech and recommend shifting to a barbelled allocation along the Treasury curve.

Special Report

Contrary to the widespread belief in the investment community, the global copper supply-demand balance is no longer in deficit. Red metal prices are set to decline by another 10-15% as the global copper market will shift to a larger surplus in the next six months.

The stock market’s pre-eminent growth sector is not US tech, it is French luxuries. No other sector can compare with French luxuries’ massive and sustained pricing power. The risk for French luxuries is not a China slowdown, the risk is that the structural increase in super-wealth comes to an end. If anything though, the coming disruption from generative AI will boost super-wealth. Ironically therefore, the best investment play on generative AI might be French luxuries.

Investors should underweight global equities and risk assets; overweight US stocks relative to global; and overweight defensive sectors versus cyclicals.

Special Report

A global portfolio is likely to return only 5.3% a year over the next decade, compared to 6.7% in the past. Investors either need to lower their return expectations, or take more risk. Our total return methodology remains consistent with previous editions, with changes limited to the Alternatives section.

The profit outlook for the Eurozone continues to deteriorate. Find out what the drivers behind this deterioration are.

Today’s Strategy Report chartbook presents the data underpinning our view that both inflation and growth are slowing, likely pointing to a recession beginning sometime in the first half of next year. We are tactically equal weight across asset classes after being stopped out of our equity overweight on August 17th and expect our next move will be to underweight equities and overweight fixed income, in line with our twelve-month view.

Special Report

Countries and commercial operators are racing into space to accrue economic gain from space exploration. In coming years, the space industry will continue to grow, as humans venture into space for tourism, mining, farming, and even habitation. The industry is still in its infancy but has tremendous potential. We believe it is one of the next big investment ideas. We will monitor the theme and take on investment exposure once it matures.

In this report, we review our FX trade recommendations with suggestions on how to position for the next few months.