In our May In Review Insight, we showed that last month, UK stocks posted the lowest z-score among all major global equity markets, underperforming their Eurozone peers. What explains this relative weakness? The chart above…
The AI craze could further lift stock prices, boost capex, and delay the onset of the next recession. Looking further out, reaping the profit windfall from AI may take longer than many investors expect.
BCA Research’s Global Asset Allocation service continues to recommend an overweight on government bonds, neutral on cash, and underweight on equities and credit. Market technicals do not suggest this is a robust…
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…
Symptoms of a liquidity trap for Chinese households are appearing. Our proprietary indicators for the marginal propensity to spend among households and enterprises continue falling. There has been a paradigm shift in Beijing’s…
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.
According to BCA Research’s European Investment Strategy service French banks are better positioned to weather current headwinds than their European peers. The team sees limited risks to the French banking sector from…
The JOLTS survey for April shows job openings unexpectedly rising from an upwardly revised 9.7 million to 10.1 million – above expectations of a decline to 9.4 million. The job openings rate inched up to 6.1% from 5.9%…
Chinese economic data releases continue to disappoint. Wednesday’s NBS PMI release showed the composite PMI dropped from 54.4 to 52.9 in May – the lowest since January. Importantly, the Manufacturing PMI unexpectedly…
Expectations for oil demand growth through 2023-24 are way too optimistic. Until these expectations fall to -0.5-1 percent, the oil price has further downside. Plus: collapsed complexity confirms that AI is in a mania, while basic…