Equities
Equity investors have been skittish about mid-cap banks ever since Silicon Valley Bank failed in March 2023. The S&P MidCap 400 Regional Banks Index remains 4% below its February 2023 high while the S&P 500 Diversified Banks Index, dominated by the…
According to BCA Research’s Bank Credit Analyst service, trade policy under a second Trump presidency represents one of the greatest cyclical risks to investors. A key question for investors is whether tariffs are prioritized early in the administration or…
Oil markets will not be impacted by Venezuela in the near term, but by shocks from the Middle East. Maduro’s ability to stay in power in the short-term removes an avenue of oil supply relief. The same avenue is cut off if Trump is reelected. Geopolitical shocks in Venezuela could present tactical buying opportunities for Chile, Peru, and Colombia.
In US dollar terms, the MSCI Emerging Market index has been flat over the past 15 years, dramatically underperforming the S&P 500 and Euro Area equities. The root cause is fundamental; EM earnings per share (EPS) growth has lagged US and Eurozone EPS…
According to BCA Research’s Emerging Markets Strategy service, there is little firepower left to sustain the US equity rally much further. The ratio of aggregate investable funds of US households and investment organizations/firms is at a record…
BCA’s composite sentiment indicator, compiled from surveys of advisors, individual investors and traders, surged over the past three months from already very optimistic levels. It reached 63% last week, a six-and-half-year high and the third highest point in…
The US economy has clearly cooled from its above-trend pace of growth in 2023. The consensus view among BCA Research’s strategists project that this deceleration will eventually culminate in a recession by year-end or early 2025. Our US Investment…
The S&P 600 and Russell 2000 have outperformed the S&P 500 by close to 10% since July 9. Small caps typically outperform in the early stages of economic expansions when growth is accelerating, demand-driven inflation is rising and lending standards…
According to BCA Research’s European Investment Strategy service, the impact on global trade from another round of tariffs under a potential Trump administration is an emerging risk to Europe. The underperformance of European equities relative to US ones…
Investors should focus on growth concerns rather than the “Trump trade.” Bond yields will fall in the short run due to cyclically disinflationary economic slowdown, rather than rise in anticipation of a Republican full sweep and inflationary policies, which are likely but not yet a done deal.