Underweight Small cap stocks appear to have hit resistance, following the flight to safety (or at least shedding international risk exposure) that has seen them outperforming this year. Recent news that an offer from the Treasury…

Underweight We moved to a large over small cap preference last month, based on the exploding balance sheets of small cap equities. Our thesis was that the rapid increase in leverage would find its way into higher risk premia for…

Underweight This week's NFIB small business survey was a record-setter on a number of fronts; the small business optimism index is at its second highest level in the survey's 45 year history with a net 34% of respondents…

Underweight In line with our renewed focus on balance sheets as a measure of risk in our portfolio positioning (please see this week's Special Report for more details), we have applied the same rigor to our size bias. With elevated…

Highlights Key Portfolio Highlights Our portfolio positioning remains firmly behind cyclicals over defensives, driven principally by our key 2018 investment themes: synchronized global capex growth (Chart 1A) and higher interest…

This week's NFIB small business survey was remarkable; small business optimism is at its second highest level in the survey's 45 year history with an all-time record high 32% of respondents saying that now is a good time to…

As noted in the previous Insight, relative margin declines for small caps seem more likely than gains. Meanwhile, small cap balance sheets have never been less prepared for such a downturn than they are right now. The relative net debt…

Small businesses have been in an ebullient mood since the Trump administration took power as key concerns, including reducing regulation and lowering corporate taxes have been aggressively addressed. However, recent readings from the…

Highlights Portfolio Strategy Relative sector index composition, the macro backdrop, relative operating metrics along with compelling valuations and washed out technicals suggest that a value over growth style bias is warranted.…

Highlights BCA expects the 2/10 curve to steepen in 1H in 2018, then flatten in 2H. U.S. equities, the stock-to-bond ratio and oil thrive when the curve is flat. Small caps struggle. Record household net worth matters more for…