Consumer Discretionary

In the previous Tinkering With Inflation Special Report, we outlined our structural view for US inflation, namely that over the next 10 years inflation will surprise to the upside largely driven by politicians re-discovering the magic of fiscal spending. In today’s Special Report, we look at…

Highlights Clients countered our opinion that China’s economy has reached its cyclical peak. However, we have already incorporated the supporting facts into our analysis so they will not alter our cyclical outlook for the economy. The favorable external backdrop is a potential downside risk to…

Highlights Higher copper prices will follow in the wake of China's surge in steel demand, which lifted Shanghai steel futures to an all-time high just under 5,200 RMB/MT earlier this month, as building and infrastructure projects are completed this year (Chart of the Week). Copper will…

Highlights President Biden’s $2.4 trillion “American Jobs Plan” is a major US public investment that will dispel any endogenous deflationary tail risk from the US economy this cycle, increase inflation expectations yet boost productivity, and hike corporate taxes. The proposal has an 80%…

  The BCA Research Global Asset Allocation (GAA) Forum will take place online on May 18th. We have put together a great lineup of speakers to discuss issues of importance to CIOs and asset allocators. These include the latest thinking on portfolio construction, factor investing, alternatives,…

While the Fed’s dots dovishly surprised, the FOMC’s output and inflation projections were on the hawkish side. Adding the committee’s core PCE price inflation estimate for 2021 to their real GDP forecast results in a roughly 9% nominal GDP estimate, assuming the PCE and GDP deflators approximate…

Highlights Portfolio Strategy Firming leading rail freight indicators signal that intermodal, coal and commodity (ex-coal) carloads are in high demand. Tack on the global economic reopening in the back half of the year and rising commodity prices, and factors are falling into place for a…

Upgrade Autos & Components And Consumer Discretionary To Neutral…

Battery Malfunction…

Underweight Recently we highlighted how the inclusion of TSLA in the S&P consumer discretionary sector catapulted the sector’s 5-year growth forecasts to the stratosphere. We also mentioned anecdotes of sell-side analysts having to conduct 20 year out DCF models to justify TSLA’s price.…