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Monthly TAA Report: Thin Is Back In! How Budgets, Growth, And Valuations Will Be Leaner Than Expected In 2025

The post-COVID recovery has been one of excesses. Government deficits have ballooned, tight labor markets have led to a windfall of consumer spending, and equity valuations have soared on the back of lofty growth expectations. But these excesses will no longer be sustainable in 2025. Our theme for next year is Thin Is Back In. Government budgets, economic growth, and equity valuations will be leaner than investors expect. We discuss this the reasoning behind this macro view and the asset allocation implications that follow from it.

Global Asset Allocation by Juan Manuel Correa
BCA’s 2025 Outlook: Walking A Tightrope
Our 2025 Outlook was just published. We revisit this year’s calls and discuss what we think is ahead for the global economy and markets for the next 12 months and beyond. The recent US election has significantly shifted our economic and market outlook. A…
Daily Insights
Governance, Scale, And Liquidity: Lessons From US Public Pension Funds
Our Global Asset Allocation team analyzed the performance and allocation strategies of 79 US public pension funds, providing insights across governance, scale, and liquidity.  Strategic Asset Allocation (SAA) is the most significant driver of fund…
Daily Insights
US Housing: Focus On Mortgage Rates Over Homebuilders Sentiment
Housing activity data missed expectations and decreased in October. Building permits came out at 1.416m vs. 1.428m in September, and housing starts decreased from 1.354m in September to 1.311m. Units under construction keep falling. Meanwhile, the November…
Daily Insights
US Employment: Noisy Jobs Report Extends Cooling Trend
The October US jobs report had mixed signals and was skewed by hurricanes and industrial strikes. Unemployment met expectations by staying unchanged at 4.1%, although it rose nearly 0.1 percentage point on an unrounded basis. Nonfarm payrolls were flat with…
Daily Insights
China PMIs: A Rebound From Low Levels
China’s Caixin Manufacturing PMI rebounded one point in October to 50.3. This was in line with the NBS PMIs from earlier this week, which also showed a modest rebound. We are looking for a turning point in China as the government unrolls stimulus measures.…
Daily Insights
Copper Remains Vulnerable
Speculators have supported copper prices as demand growth slowed below the pace of supply growth. Our Commodity and Energy Strategy colleagues believe this does not bode well for the metal. The copper market faces a situation where demand growth will be…
Daily Insights
US Consumers Are Not All The Same
As US consumers remain one of the few engines of global growth, our US Investment Strategy colleagues took a deep dive on consumer trends, augmented with comments from US banks’ earnings calls. Middle-aged consumers have fallen behind the young and old.…
Daily Insights
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Germany: Sick But Not Dead

Germany’s economy has lagged that of the rest of Europe for nearly 10 years. So have German stocks. Investors are extrapolating these trends to bet on the country’s deindustrialization. Could Germany manage to beat dismal expectations?

European Investment Strategy by Mathieu Savary
Economic Sentiment And The US Election
The main driver of global consumer sentiment in the past few years has been high inflation. Nowhere has this been the case more than in the US, where measures of animal spirits were depressed despite a roaring economy. Today, inflation worries have eased, but…
Daily Insights

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