Latest from BCA Research

Special Report

Turn negative on European credit. At current levels, spreads do not compensate for the risk of a recession materializing later this year or in early 2025.

Even after the Fed cuts rates, policy will remain restrictive for some time. Moreover, in history, stocks have tended to fall around the first rate cut. We remain cautious on the outlook for the economy and risk assets.

MacroQuant continues to recommend underweighting equities and overweighting bonds. This is consistent with the Global Investment Strategy Team's decision to downgrade global equities to underweight in late June.

MacroQuant continues to recommend underweighting equities and overweighting bonds. This is consistent with the Global Investment Strategy Team's decision to downgrade global equities to underweight in late June.

This Insight looks at potential dollar moves in the next six-to-twelve months.

Bank Credit Analyst

Bank Credit Analyst

In Section I, we discuss the economic and financial market outlook in the wake of Jerome Powell’s Jackson Hole speech. Equity investors may pursue a bullish rate-cut narrative for a few months, and it is possible that the economic data will remain consistent with a soft landing for a time. However, we recommend selling rather than buying such a rally, given an ongoing decline in labor demand that will ultimately turn recessionary. Investors should remain conservatively positioned. In Section II, we present a list of answers to questions that we have received about our equity portfolio positioning recommendations. We continue to recommend underweighting small caps, overweighting US stocks, and favoring defensive sectors. We are neutral growth versus value for now but expect to downgrade once clear recessionary dynamics emerge.

Chinese property developers will require at least RMB 500 billion in additional government funding to prevent further declines in housing completions for the rest of 2024. However, without addressing the underlying challenges, any new rescue measures similar to those announced in May are unlikely to effectively support the real estate market.

Special Report

This companion piece to our updated return assumptions offers our analysis on themes related to strategic asset allocation. This year, we discuss: The long-term outlook for US stock market outperformance, the role of dilution and economic growth in long-term equity returns, how investors can use equity factors over the strategic horizon; the role of the term premium when making a strategic allocation to government bonds, and the benefits of including commodities in a strategic portfolio coupled with the dynamics of commodities supercycles.

Special Report

We update our long-term return assumptions for public and private assets. A global portfolio is likely to return only 4.4% a year over the next decade, compared to 6.9% in the past. Investors either need to lower their return expectations, or take more risk. On top of this annual update, we are also publishing a companion piece offering our analysis on the long-term return outlook for different asset classes.