Developed Countries
Today we update our Millennial Basket as four stocks have gone parabolic and are in need of rebalancing. Specifically, we rebalance AMZN, NFLX, SPOT and TSLA lower, and AAPL, HD, LEN, MSFT, V, UBER higher to bring the index back to an equally weighted state. Our Millennial Basket is up 80% in absolute terms and 58% relative to the SPX since inception in our June 11, 2018 Special Report. In addition, we also recommended investors overweight our Millennial Basket on a secular ten year view basis, predicated upon our Millennials spending theme. While profit potential has not changed, recent price action in AMZN, NFLX, SPOT, and TSLA compels us to rebalance this basket back to equal weight and protect profits as valuations went vertical. Bottom Line: We reiterate our structural and cyclical overweight stance on our Millennial Basket. The ticker symbols in this US Equity Strategy basket are: AAPL, AMZN, UBER, HD, LEN, MSFT, NFLX, SPOT, TSLA, and V.
The JOLTS survey for May showed that the US labor market was healing in the late spring, as the incremental pace of layoffs normalized to pre-COVID-19 levels and hiring rebounded as employers recalled workers furloughed during the peak of the economic…
BCA Research's US Bond Strategy service re-iterates its overweight stance on municipal bonds. Municipal bonds outperformed the duration-equivalent Treasury index by 68 basis points in June, bringing year-to-date excess returns up to -582 bps (before…
BCA Research's Global ETF Strategy service concludes that a resurgence of geopolitical uncertainty casts a shadow on the short-term outlook for risk assets’ continued recovery. Our Geopolitical Strategy team highlights that equity volatility always tends…
BCA Research's Foreign Exchange Strategy service's intermediate-term model shows that the Swedish krona is now quite cheap. As such, it is one of their favorite longs. Meanwhile, since the Fed extended its USD swap lines, SEK has lagged the bounce in AUD,…
BCA Research's US Bond Strategy service has downgraded non-agency CMBS. Our view of non-agency CMBS has not changed during the past month, but we realize that it is more accurately described as a “Neutral” allocation as opposed to “Overweight”. We…
BCA Research's Global Fixed Income Strategy service is initiating a long 7-year bullet vs. 5/10 barbell trade. Even though steepeners in the US are currently expensive, valuations can become even more overstretched with the Fed signaling no rate increases…
The Bank of Canada Business Outlook Survey (BoS) for Q2 was inordinately weak. The overall number fell to -7 and the Outlook for Future Sales reading tanked to -35, levels reminiscent of the GFC. Moreover, the Capacity Pressures and Labor Shortages components…
S&P Industrials are set to outperform the US broad market. A steady rebound in US manufacturing activity bodes well for industrial equities. The US ISM manufacturing survey recently punched above the 50 boom/bust line and the global industrial cycle…
Since March 2018, the Chinese yuan has been driven by geopolitical forces, specifically, the evolution of tariffs imposed by the US on China’s exports. In recent weeks, financial variables seem once again to drive the CNY’s fluctuations. The muted US…