Latest from BCA Research

How big a problem are the non-performing loans in Italy and Greece? And what is the solution?

The near-term (next month or two) market dynamics in EM risk assets remain a coin toss. Beyond that the outlook for EM risk assets remains downbeat. EM financial markets are complacent and there are many potential negative EM/China developments that could derail the current EM rally. A new trade: go long the KOSPI / short EM overall equity index.

Most financial assets are trading within the confines of the feedback loop between markets and Fed policy. Investors should avoid expensive assets such as spread product, and hold positions with attractive long-term value such as U.S. TIPS over nominal Treasuries and U.S. Treasuries over German bunds.

Most financial assets are trading within the confines of the feedback loop between markets and Fed policy. Investors should avoid expensive assets such as spread product, and hold positions with attractive long-term value such as U.S. TIPS over nominal Treasuries and U.S. Treasuries over German bunds.

Special Report

Brazil is not a buy. Impeachment alone is not a solution to Brazil's problems. Recent political changes will prove insufficient to alter the public debt dynamics in Brazil. Investors should focus on the bigger picture. Without severe fiscal austerity, Brazil is headed for a debt crisis in the next few years.

Like the economy, banks show no major imbalances. But the "glide path" for credit is slower than in previous cycles.

Sell the bounce in banks, which face a triple whammy of earnings threats. This will reduce our financials sector allocation to underweight, making room for last week's energy upgrade.