We are compelled to downgrade banks and investment banks to neutral in advance of the release of the Fed’s stress tests this Thursday. This downgrade also pushes the financials sector overweighting to neutral. Our worry…
Overweight Capital markets stocks have come out of hibernation recently and are on the cusp of breaking out – in a bullish fashion – of their 18-month trading range. Total mutual fund assets are expanding at a…
Highlights Portfolio Strategy There are high odds that China’s real GDP deceleration will continue for the next decade, casting a shadow over the profit prospects of the S&P 1500 metals & mining index. A structural below…
Overweight The recent global move away from risk assets has been a headwind for the high-beta S&P investment bank and brokers index that thrives when risk appetites are healthy. Still, the return of volatility should be a boon to…
Overweight The S&P investment bank and brokers index has been an excellent performer through the early days of the Q2 reporting season as results have generally been besting estimates and the outlook remains solid. Our…
Highlights Portfolio Strategy Expensive valuations leave no room to maneuver in the S&P real estate index that has to contend with a higher interest rate backdrop and deteriorating cash flow growth fundamentals. Trim to…
Overweight We have recently been highlighting the burgeoning capex upcycle as the key investment theme driving our sector rotation into cyclical stocks over defensives. The investment bank & brokers index in particular thrives…
Highlights Portfolio Strategy The financials sector's fortunes are linked to the path of 10-year Treasury yields. BCA's view of a selloff in the bond market bodes well for this interest rate-sensitive sector. The S&P…
Overweight - High-Conviction The S&P asset management and custody banks (AMCB) index has outperformed both the S&P 500 and the broad financials index since we lifted it to a high-conviction overweight in mid-February. The…