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United States

2023 Key Views: ‘Chimerica’ In Trouble
Special Report

Both the US and China have structural imbalances that need correcting. The former has a structurally imbalanced labour market in which demand far outstrips supply. The latter has a massively overvalued housing market. The concurrent correction of these two structural imbalances in the world’s two largest economies will necessitate a sharp slowdown in global growth, and leads to several investment conclusions.

Counterpoint by Dhaval Joshi
Downshift
As expected, the Fed slowed the pace of rate hikes at its Wednesday meeting, opting to lift interest rates by 50bps following four consecutive 75bp increases. The statement was unchanged, with the Fed reiterating that it “anticipates ongoing increases in the…
Daily Insights
US Equity Sector Earnings Will Be Revised Lower
BCA’s annual outlook for 2023 concludes that “either the onset of recession in the US, or a further decline in risky asset prices in anticipation of an eventual US recession, will likely occur at some point next year.” The report also highlights that the…
Daily Insights
US CPI Inflation Eases Further In November
US CPI inflation cooled for a second consecutive month in November. The headline figure eased to 0.1% m/m (7.1% y/y), falling below consensus estimates. Core inflation was also softer-than-anticipated, moderating to 0.2% m/m (6.0% y/y) from 0.3% m/m (6.3%…
Daily Insights
Will An Improvement In US Consumer Confidence Boost Equities?
Preliminary results from the University of Michigan Consumer Sentiment Survey suggest that American household morale firmed in December. The headline index climbed 2.3 points following November’s decline to 56.8. Importantly, consumers’ assessment of current…
Daily Insights
S&P 500 Pricing Power: A Sector Breakdown
On aggregate, US firms experienced a sharp increase in pricing power following the initial shock of the COVID-19 pandemic. However, this trend has since reversed, and companies’ pricing power is fading. The darkening economic backdrop ultimately limits firms’…
Daily Insights
S&P Valuations Ahead Of Bear Markets
The chart above shows equity valuations ahead of the eight most recent major S&P 500 drawdowns. It suggests that there is some evidence that the magnitude of decline in equity prices is somewhat dependent on equity valuations ahead of the drawdowns. In…
Daily Insights
2023 Key Views: Preparing For A Pivot Of Our Own
Special Report

Following the release of the Bank Credit Analyst’s annual outlook, we unveil our key views for 2023. The investment strategy takeaway is that we want to lean into risk in the early part of the year but reduce exposure to it in the second half.

US Investment Strategy by Doug Peta
2023 Key Views: Europe’s Pivot Year
Special Report

We explore the eight major themes that will define economic and market trends for Europe next year.

European Investment Strategy by Mathieu Savary, Jeremie Peloso
The Dollar And Relative Interest Rates
  According to BCA Research’s Foreign Exchange Strategy service, a winning strategy is to be long currencies where real interest rates could rise in a recession. These include petrocurrencies (specifically the NOK), as well as the currencies of…
Daily Insights

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