Latest from BCA Research

Special Report

Generative AI is a major technological breakthrough that holds tremendous economic and investment promise and will have sweeping effects on wide swaths of the economy. We are bullish on generative AI as a long-term investment theme. However, at the moment we observe hallmarks of an investment frenzy. We believe that there will be a more attractive entry point for patient investors.

Our fixed income strategists recommend positioning for a bear-flattening of the US Treasury curve.

The UK economy is more resilient than was feared last year. While this will not help UK stocks, the Footsie’s long term prospects are appealing.

Investors in Europe and the American West are already starting to think about the implications of the 2024 election, given that sticky inflation and tighter monetary policy keep the risk of recession elevated.

Special Report

The first legislative meeting of Xi Jinping’s third term suggests that Chinese policy is continuous and consistent with the previous ten years, which is negative for long-term productivity.

In this report, we look at data releases over the last month and implications for currency markets.

The development of trading blocs and the rise of economic warfare will lead to the inefficient allocation of resources. Higher fiscal outlays and tight commodity supplies will feed into energy prices driving headline inflation. It also will drive demand for inventories as hedges against supply volatility globally higher. We remain long equity exposure via ETFs to oil and gas producers, and metals miners. We also retain our exposure to commodities via the COMT ETF.

Special Report

China’s labor market is polarized between high unemployment among university graduates and an acute shortage of blue-collar labor. The high jobless rate among young workers is structural and will not decline a lot even during an economic recovery. Given the structural scarcities of blue-collar workers, the authorities will be less inclined to resort to their old playbook of stimulating infrastructure, construction, and manufacturing.

The combination of collapsing energy inflation and cooling wage inflation means that euro area core inflation will slump later this year. We discuss the consequences.

After an optimistic January, markets had a reality check in February and reversed some of their YTD gains. The high quality, low vol tilt of the BCA Score enabled both portfolios to outperform their benchmarks.