Latest from BCA Research
Beginning with this Quarterly report, The Global Asset Allocation and Private Markets teams are combining our quarterly outlooks into a single, unified framework, reflecting a more integrated approach to portfolio construction. In this joint outlook we upgrade Private Equity to overweight. Sentiment has soured, LPs are starved of distributions, flows have collapsed, valuations are trending lower, Secondaries are outperforming Primaries, and GP stocks are experiencing their worst underperformance on record. All signs of a durable bottom.
MacroQuant recommends underweighting equities and adopting a benchmark duration stance in fixed-income portfolios. The model is very positive on the US dollar, bearish on gold, neutral on copper, and bullish on oil.
Geopolitical risk may rotate to Russia/Ukraine in Q3, while the Middle East could reignite in Q4.
The S&P 500 has become increasingly concentrated. We know that. But the critical question is not how many stocks are driving the market; it is how many factors are driving stocks. We define an AI risk factor to test whether AI has become the dominant common exposure throughout much of the factor zoo.
The equity bull market is getting long in the tooth. Bonds should perform well once economic growth begins to slow. The dollar will strengthen over the coming months before resuming its downtrend. While crude has likely found a near-term floor, we favor metals over energy in the long run.
Section I maps how the broad distribution of wealth gains is supporting US consumption. Section II examines how countries can meet swelling electricity demand. The winners will find paths to build the infrastructure needed to power the high-tech future.