Bear/Bull Market
Since the release of softer (than expected) CPI numbers in the US, markets have embraced a soft-landing scenario for the global economy. In the FX space, the DXY has broken down below the psychological level of 100. Will this lead to further downside, or…
BCA Research’s Foreign Exchange Strategy service uses three simple rules when trading the dollar over a medium-term horizon (12-18 months). What could the macro outlook look like? What is happening to valuations? And where does market sentiment lie? The…
On a 12-month investment horizon, BCA Research’s Global Asset Allocation service recommends a defensive stance: Overweight government bonds, and underweight equities and credit. The US stock market trades on 19x forward earnings (and that is based on…
In a recent report, our Emerging Markets Strategy team posited that the bear market in Malaysian stocks will be prolonged. Disinflationary forces have taken hold of the Malaysian economy: money supply has plunged, bond yields are falling, and the yield…
As the S&P 500 nears our 4,500 target, we review the rationale behind the call to assess its merit.
China’s economic data releases for May fell below consensus estimates. The 7.2% y/y contraction in property investment in the first five months of the year was worse than the expected 6.7% decline. The deceleration in retail sales growth from 18.4% y/y to…
On June 7th, the VIX closed just below 14, its lowest level since the onset of the pandemic. The index has been on an unprecedented downtrend since March. In fact, the most recent 60-day change in the VIX is in the bottom 3% of all 60-day moves. Lower…
Global financial markets relapsed in May. After a relatively strong start to Q2, most of the major financial assets we track generated below average returns last month. A shift in investor expectations for the path of the Fed funds rate, the resurfacing of…
Risk assets would perform well over 12 months only if inflation falls to 2% without triggering a recession. That would be unprecedented. We recommend investors stay defensive.
Pent-up demand for services is keeping the global economy going, but we still expect recession over the next 12 months. Investors should keep a cautious portfolio stance.