Asset Allocation
The odds have risen that we have reached a “Metaverse Moment” – a situation where investors punish AI companies for increasing capex. This warrants greater caution towards AI stocks specifically, and the broader S&P 500 more generally.
Today, we are sending you the BCA annual outlook for 2026. The report is an edited transcript of our recent conversation with Mr. X and his daughter Ms. X, who are long-time BCA clients. Our discussion featured BCA’s economic and financial market outlook for the year ahead.
The trade war hit Canada’s economy hard, but the worst is over. In our latest update on Canada, we assess the aftermath of the trade shock, the new budget, and the effects of BoC easing. We outline what this means for duration, the Loonie, and Canadian stocks heading into 2026.
We discuss which variables we are tracking to assess the risks to the bull market in the absence of government data. So far, we do not see any obvious red flags. Remain overweight on equities and fixed income.
MacroQuant is tactically overweight equities, favors an above-benchmark duration stance in fixed-income portfolios, remains bearish on the US dollar, and is bullish on gold and copper.
The rush to build AI infrastructure is based on a false premise: that there are significant advantages to being the first to come to market.
Precious metals, corporate credit, and tech stocks are all showing signs of late-cycle euphoria. We identify various trigger points that investors should monitor to turn more bearish.
In this Q4 Strategy Outlook, we discuss where we stand on our recession call, the outlook for stocks and bonds in various scenarios, why investors are misunderstanding the impact of AI on corporate profits, whether the US dollar has entered a structural downtrend, our perspective on the yen, gold and other commodities, and much more.
World War III will not happen. But if you disagree, here is our portfolio to hedge it: commodities, neutrals, and crypto.
Despite concerns about fiscal sustainability, a rise in term premia, and attacks on central bank independence, monetary policy remains the primary driver of bond markets. In our Q3 Review & Outlook, we update our views and identify opportunities in government bonds, short-term interest rate futures, global yield curves, inflation-linked bonds, and credit.