Developed Countries
Our US Investment Strategy service is more optimistic about the US economy and US equity performance in the near term than the consensus inside and outside of BCA. Its near-term optimism largely derives from its view that US households have the capacity and…
Since 1970, the track record of US housing recessions as the ‘canary in the coal mine’ for economic recessions is a perfect four out of four: 1974; 1980; 1990; and 2007. If this perfect track record continues, the current US housing recession presages an economic recession that starts in 2023. We discuss the investment implications.
February flash PMIs showed a stronger improvement in service sector activity relative to the manufacturing sector in February. Services PMIs increased across all major DM economies (US, Japan, Eurozone, Germany, France, and UK) and exceeded consensus…
The equity weakness that began on February 3 is broad-based with all S&P 500 sectors registering declines over this period. Cyclicals and interest rate sensitive sectors are experiencing the brunt of the selloff with communication services (-10.6%), real…
The EUR/SEK has been on a strong upward trend, appreciating 13% since its 2021 lows. However, its bull run is coming to an end. According to BCA’s European Investment Strategy team, this cross is now expensive and short- and long-term momentum indicators have…
According to BCA Research’s US Bond Strategy service, US bond investors should overweight TIPS versus nominal Treasuries as a hedge against inflation taking longer to fall than they anticipate in their base case. While the team doesn’t see enough inflation…
The preliminary estimate of the European Commission’s consumer confidence indicator rose by 1.7 points to a 1-year high of -19 in February, in line with expectations. This marks the fifth consecutive improvement in household sentiment. Firming consumer…
The S&P 500 has rallied by an additional 6.2% so far this year, bringing its gain since its October 12, 2022 trough to 14%. Positive global developments including China’s reopening and the ebbing European energy crisis amid warmer-than-anticipated weather…
According to BCA Research’s European Investment Strategy service, the green light to buy and overweight European banks and financials will come once the ECB relents on its hiking campaign. The positive long-term outlook for European financials, including…
This week’s report considers the risk that inflation will be stickier than we anticipate, and looks at what a fair value for the 10-year Treasury yield might be in a scenario where the Fed keeps the policy rate on hold for a prolonged period.