Highlights Recent economic and inflation data can be characterized as Goldilocks: strong enough to keep recession fears at bay, yet not hot enough to warrant Fed tightening. Historical precedent suggests that the current period of…
An Insight early in the year, highlighted that the NFIB small business survey was at an historic extreme, and that was typically a precursor to a reversal of fortunes in the small/large ratio. Since then, small caps have modestly…
The small/large cap share price ratio has soared since the U.S. election, and a much needed correction/consolidation phase has materialized. Whether this develops into a bearish trend change depends on the path of relative profit…
Highlights President Trump is as protectionist as Candidate Trump; USD shortage to tighten global financial conditions; Go Long MXN/RMB as a tactical play on U.S.-China trade war; Brexit risks are now overstated; EU will not twist…
Beyond the potential small cap profit margin squeeze yellow flag that we highlighted in the previous Insight, the small/large ratio also appears technically stretched. The chart shows that every time the NFIB survey soars to beyond the…
President-elect Trump and the euphoria surrounding his small government plans along with tax reform are reverberating across the small business sector. The latest NFIB survey surged to the highest level in years, recording the largest m…
Highlights After steep climbs in November and early December both bond yields and stock prices were overdue for a pause or correction. Although the domestic economy is on reasonably sound footing, stock prices have now discounted way…
Highlights BCA's U.S. Equity Strategy team would like to wish our clients a healthy, happy and prosperous New Year. Portfolio Strategy The growth vs. value style bias is due for a bounce, but beyond the near run, the outlook…
Highlights Recent market moves have been emotionally driven and speculative in nature. The risk is now that tighter monetary conditions risk crimping growth in the near term. Since 2014, whenever the 10-year Treasury yield has reached…
The previous Insight showed that the fundamental backdrop is shifting decisively in favor of domestic vs. globally-oriented equities. That is a major plus for U.S. small vs. large caps. In fact, a broad-based and powerful rotation into…