Latest from BCA Research

In this insight, we assess the prospect of the Swiss franc over the next six months.

Special Report

The odds of Russia cutting oil output will rise going into 4Q23, as Ukraine’s endgame increases pressure on it, and it actively seeks to undermine President Biden’s re-election. We reckon a 2mm b/d cut would push Brent above $140/bbl by December 2024. This would push inflation and inflation expectations higher and raise the odds of more Fed rate hikes. BCA Commodity & Energy Strategy will remain long the COMT and XOP ETFs. At tonight’s close, we will be getting long December 2024 $100/bbl Brent calls.

The Global Equity Score falls slightly but remains neutral, ending its 7-month up-trend. We use this possible inflection point signal to look into how the ACWI behaves over different forward return horizons based on the level and change in the Global Equity Score. We find the current score dynamics support a "fat and flat" view of risk and return over the remainder of the year.

Special Report

The Supreme Court is a generator of certainty rather than uncertainty for US markets. In the event of a constitutional crisis, a court intervention will likely reduce volatility.

Collapsed complexity, plus the unwinding of favourable base effects and favourable seasonal adjustments to the inflation and jobs numbers, all pose a danger to the Goldilocks market.

MacroQuant is overweight equities and cash and underweight bonds.

Special Report

Some investors have thrown in the towel on investing in Chinese equities, instead deploying capital in EM ex-China – or at least contemplating doing so. This report examines the merits of investing in EM ex-China stocks and concludes that EM – whether including or excluding China - will continue underperforming DM equities.

History suggests that a “soft landing” is highly unlikely after such an aggressive Fed tightening cycle. The rally could continue for a little longer but, on the 12-month horizon, market risks are very skewed to the downside.

Special Report

The trajectory of China’s infrastructure investment in 2023H2 will be like what occurred in 2021H2. Growth will likely drop from the current nominal 10% to 0-2% in the next six months. China will continue promoting environmentally friendly infrastructure projects that may prevent a contraction in infrastructure investment in 2023H2.

We recently collaborated with Irene Tunkel, our US Equity Strategist, and are excited to share with you her latest views on earnings growth. She quotes sales growth and falling input costs as tailwinds for earnings growth. However, rising labor costs will diminish a firms' ability to pass on labor cost increases to customers, cutting into profit margins, meaning the rebound may be muted.