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United States

The US Approaches Its ‘Event Horizon’

Heading into a black hole, you pass a point of no return known as the ‘event horizon’ after which your impending oblivion is sealed. US recessions also have an event horizon, which we are fast approaching. We reveal a leading indicator of this event horizon, and what it means for investment strategy.

Counterpoint by Dhaval Joshi
Are Investors Too Complacent?
Consumers are not the only ones experiencing an improvement in their morale (see Indicator Spotlight). The latest American Association of Individual Investor (AAII) bull-bear survey, released last week, shows that a net 2% of investors were downbeat on the…
Daily Insights
The 2000-2001 Roadmap
According to BCA Research’s Emerging Markets Strategy service, the sustainability of the equity rally depends on whether corporate profits hold up. It is not unusual for a period of equity gains to occur between an inflation-driven selloff and…
Daily Insights
To Chase Or Not To Chase?

It is not unusual for a period of rebounding share prices to occur between an inflation-driven selloff and a growth scare. Initially, stocks rally on falling inflation and prospects of lower interest rates. Then, worries about corporate profits intensify, and equity prices deflate along with falling Treasury yields. This is what happened in the US in 2000-2001 and is likely to occur in the coming months.

Emerging Markets Strategy by Arthur Budaghyan
Will US Consumption Hold Up?
The outlook for US consumption is a source of debate among BCA strategists. To the extent that it represents two thirds of the US economy, it is also the source of diverging views on the outlook for equities. The BCA House View recommends a defensive…
Daily Insights
Asian Business Cycle: A Red Flag For US Corporate Pricing Power
US S&P 500 operating profit margins have compressed to 15% from 16% in October 2021. Our US Equity Strategists expect this trajectory to continue and project that operating margins will weaken to below their 13% pre-pandemic level. Notably, BCA’s…
Daily Insights
Will European Spreads Continue Narrowing?
The spread between 10-year Italian BTPs and German Bunds has been narrowing in recent months. This decline is consistent with the falling MOVE Index of US Treasury option volatility. However, hawkish rhetoric from ECB Governing Council members –…
Daily Insights
The Fed: Preparing To Pause
BCA Research’s US Bond Strategy service expects the Fed to deliver two more 25 basis point rate hikes before going on hold after the March FOMC meeting. Fed Governor Lael Brainard delivered an important speech last week in which she laid out the…
Daily Insights
Preparing To Pause

Fed Governor Lael Brainard delivered an important speech last week in which she laid out the intellectual justification for the Fed to soon pause its rate hike cycle. This week’s report reviews her arguments and explains how they inform our monetary policy and investment views.

US Bond Strategy by Ryan Swift
Heed The Signal From US Homebuilder Stocks?
US homebuilder stocks have been steadily outperforming in recent months, up 29% since the S&P 500’s October 12 bottom – 18 percentage points above the benchmark index. The nearly 100bp decline in the 30-year mortgage rate since early November,…
Daily Insights

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