Latest from BCA Research
A short guide on how best to use and interpret our real-time fractal heatmap for asset allocation.
The CNY/USD has room to appreciate both cyclically and structurally, while nominal yields on China’s long-duration government bonds are set to fall. This combination supports Chinese equities.
Big Tech and the Trump administration are engineering an industrial boom that favors American hardware over American workers. Economic growth will be robust in the US but the labor market will stay relatively sluggish. Adopt an overweight stance on both equities and fixed income and underweight on cash. Upgrade Canadian equities and downgrade the UK. Upgrade Industrials and downgrade Consumer Staples. Upgrade EM Debt. Downgrade Private Credit.
MacroQuant is neutral-to-slightly positive on stocks on a tactical 1-to-3 month horizon but sees downside risks over a longer-term horizon. Its favorite equity sectors are communication services and IT. Regionally, it prefers EM and US equities. The model is bullish on duration. It remains bearish on the US dollar. It is upbeat on gold and copper but is slightly negative on oil.
US Real Estate has been under pressure post-2022. This chartpack offers a snapshot of the cap rate cycle across measures, sectors, and cities. Industrial and Multifamily spreads remain tight while Office and Retail have peaked. Chicago and Houston differ as cities, but their Real Estate trends look increasingly alike.
We remain cyclically short Brent but are tightening the stop loss to $73/bbl to guard against a geopolitics-driven upside break.
Monetary policy divergences are re-emerging. We rely on BCA’s Central Bank Monitor to assess the current policy stance of major central banks, and highlight the tactical opportunities across bond markets and currencies.
This week our screeners explore offshore Chinese internet stocks, US Healthcare equities, and sectoral opportunities in the Canadian bourse.
Rising Russia-NATO risks, tactical oil/gold trades, tougher sanctions on Russia (maybe China), China stimulus with ~5% growth target, and US checks on Trump’s ambitions will define Q4.