Equities

Special Report

In this report, penned by BCA’s Global Investment Strategy team, our colleagues examine a wide range of strategies designed to capitalize on stock market anomalies. GIS will be using a mixture of these strategies for its new PowerTrades service.

According to our latest client poll, most respondents are optimistic about the Generative AI's potential. Investors remain divided on whether current equity valuations reflect a bubble. Economic concerns continue to center on bond yields and the risk of stagflation, while relatively few clients anticipate a recession. In terms of portfolio positioning, an overweight in Technology received the strongest endorsement.

The economy is slowing, but not collapsing, and monetary easing is imminent — a backdrop that will benefit equities. We remain strategically bullish, with a close eye on GenAI and resilient earnings, even amid numerous risks. However, we are tactically cautious, as seasonality, elevated valuations, and stretched technicals present near-term headwinds.

Special Report

The resilience of US non-tech companies' profitability has not been driven by top-line growth but by falling costs, which safeguarded profit margins. Presently, risks in US stocks outweigh the potential rewards – margin sustainability is uncertain while equity valuations are very stretched.

GenAI momentum is building. Many companies are already reaping benefits from the technology. GenAI is disrupting entire industries, such as education, image generation, and staffing. Investors should prefer our “disruptors” basket over the “disrupted” basket.

The Q2 earnings season delivered solid earnings and sales growth and resilient margins, reassuring investors that corporate America remains in good health and is capable of navigating economic uncertainty while mitigating the impact of new trade levies. The outlook is generally positive, but with one important caveat: The full effect of tariffs has yet to materialize.

The Q2 reporting season underscores the resilience of corporate earnings, supporting our bullish outlook for equities, an outlook further bolstered by expectations of fiscal and monetary easing. However, for now, we are booking profits, closing overweights in Technology and Growth, and initiating a new overweight in Real Estate.

Special Report

Crypto adoption is set to accelerate following the passage of the GENIUS Act, which establishes a regulatory framework for digital assets. Companies across the crypto ecosystem are well-positioned to benefit from digital asset growth and price appreciation. Crypto equities are a new strategic allocation, and we recommend using pullbacks to build a long-term position using ETFs.

Special Report

Despite macro headwinds, the OBBBA clearly favors Industrials, Financials, and Consumer Discretionary equity sectors. A carefully constructed, factor-aware basket in these sectors is well positioned to outperform in a fiscal-driven, uncertain environment.

Earnings growth should continue to support equity performance this year. However, after blockbuster gains, some profit-taking is likely. We recommend booking profits and increasing exposure to Defensives.