United States
Maintain a modestly defensive stance as consumption fundamentals become increasingly fragile. US consumption in October and November was stronger than expected, but its support pillars have become more fragile. Real spending rose 0.3% m/m in both October and…
The 10-year Treasury term premium is now competitive with Baa- and Ba-rated credit spreads. Even without term premium compression, duration carry trades could outperform credit carry trades in a low rate vol environment.
Favor curve steepeners and gold as recent price action highlights rising term premia and diversification away from US assets. With markets closed on Monday for the MLK holiday, Tuesday’s session saw price action reminiscent of last year’s “Sell America” trade…
Do not add tactical risk yet, and monitor rates volatility for a potential re-entry point. A key factor supporting the S&P 500 beyond the AI narrative in 2025 has been declining rates volatility. Despite occasional wobbles, the MOVE index trended lower…
Greenland has moved to the forefront of geopolitics, but a non-military resolution remains the most likely outcome. Our Geopolitical strategists do not expect the US to seize Greenland by force or collapse NATO. Nonetheless, they judge that this is not the…
Remain cautious on US equities and the dollar. Our monthly BCA Views meeting concluded that the outlook has become slightly more constructive. Recession risk over the next 6-12 months remains elevated but has diminished as growth and labor market conditions…
Our US Investment strategists expect accommodative monetary policy in 2026, but equities may be less responsive than in prior easing cycles. Historically, equity returns have been significantly stronger under easy policy, and further Fed cuts are expected…
Investors should bet against the US seizing Greenland by force and collapsing NATO. But stay tactically defensive anyway.
Our Counterpoint Strategists remain underweight duration, underweight US Treasuries versus other DM bonds, and underweight the dollar, as they see Fed cuts risk reigniting inflation. With both the unemployment rate and interest rate near their estimated…
Maintain a modestly defensive allocation as manufacturing surveys signal resilience without momentum. The January Philly Fed and Empire Manufacturing surveys both beat estimates, rebounding to 12.6 from -10.2 and to 7.7 from -3.9, respectively. New orders and…