Latest from BCA Research

A global comparison suggests that China's capacity utilization does not appear particularly weak compared to other countries. The excess capacity problem is not unique to China, and therefore cannot be explained by China's investment-driven growth model. Chinese stocks have been unduly punished by the "overcapacity" stigma, which is unwarranted and will eventually correct.

Special Report

Within the EM equity space, country effects still significantly overwhelm sector impact. In turn, the importance of country selection within advanced countries has dropped. Macro analysis is still very pertinent with respect to adding alpha when investing in EM stocks. At this moment, the macro outlook does not warrant a bullish stance on EM.

There are no indicators that consistently lead share prices or can differentiate cyclical bull markets from short-term oversold rebounds. Investors who are right on the big-picture view will be rewarded, and vice versa. From a big-picture perspective, our bias remains that EM/China growth will not pick up sustainably, and that EM EPS will not recover materially in the next 12 months. Therefore, we recommend fading this rally.

The Fed's recent dovishness represents an acknowledgement of the feedback loop between Fed policy and financial conditions. Expect Fed hawkishness to ramp back up prior to the next rate hike, likely in June.

The Fed's recent dovishness represents an acknowledgement of the feedback loop between Fed policy and financial conditions. Expect Fed hawkishness to ramp back up prior to the next rate hike, likely in June.

The Fed's decision to scale back intended interest rate hikes reflects economic reality.