CoreMacro

The US economy is set to enter a recession within the next few months. Stay underweight equities and overweight cash. Look to increase fixed-income duration exposure over the coming months. The euro is likely to strengthen and European stocks should outperform US stocks over the next month or so, but these trends will reverse by the middle of this year.

US growth has slowed in recent weeks. This can be seen in the weaker data on retail sales, consumer confidence, services PMIs, and a swath of housing releases (notably starts, existing home sales, homebuilder confidence, and stock prices). It can also be seen in the decline in GDP tracking estimates. The Atlanta Fed's GDPNow model projects growth of 2.3% in Q1, down from a peak of 3.9% on February 3. The Citi US Economic Surprise Index has also dipped into negative territory.

Special Report

The Trump administration posits that the world owes the US for the provision of its security. In this report, we perform a quantitative analysis to come up with a naïve estimate of the cost of that peace. More importantly (and more seriously), our qualitative assessment argues that save for a number of frontline countries that rely on the US defense umbrella, the vast majority of the world faces manageable security threats due to the complex multipolar global environment and a growing number of alternatives to the US security blanket.

Special Report

Thanks to their attractive valuations, European equities are piquing the interest of global investors. Is there more to the appeal of European stocks or do they remain a mere value trap?

In his latest Thoughts Of The Day, Peter Berezin discusses the different moving parts of the global economy today and the potential impact of Trump's policies.

While the US economy could remain upright on the tightrope for a while longer, it will inevitably fall, leading to a major bear market in stocks. We will be looking to our MacroQuant model for guidance on when to turn fully defensive. We are not there yet.

Special Report

In this Special Report, BCA’s Chief Geopolitical/US Political Strategist Matt Gertken discusses the top five “Black Swan” risks for 2025, from Trump to China.

Stocks have climbed the wall of worry and we are about to see what is on the other side (it won’t be pretty). We will be using our MacroQuant model to determine when to go maximally underweight equities.