Latest from BCA Research
Investors should be tactically tilting allocations towards Direct Lending, Distressed Debt, and Directional Hedge Fund strategies at the expense of Real Estate, Private Equity, and Diversifier Hedge Funds. Structural opportunities are emerging in Real Estate and Venture Capital.
In this Strategy Insight, we assess the monetary policy path for Australia and Canada in 2024 and we discuss how to profit from a growing divergence between the two economies.
The SIFI banks expressed confidence in their credit outlook for 2024 and expect that credit losses will crest soon, given the reserves they’ve already set aside. Their implicit embrace of the soft-landing narrative suggests to us that the consensus is getting closer to being set up for disappointment. We remain tactically equal weight equities and fixed income but think conditions may soon favor turning defensive.
Disinflation coupled with sticky wage growth is likely to result in either a second wave of inflation or layoffs and a recession. In the meantime, market expectations for sales, growth, and margins are overly optimistic and are inconsistent with macroeconomic headwinds. We recommend gradually realigning the portfolio to a more defensive stance.
The ECB will begin cutting rates in June, what does this start date imply for the yield curve and European cyclicals?
Investors have taken comfort in the fact that unemployment has remained low in the major economies. But underneath the surface, there are clear signs that labor demand is weakening. The clock keeps ticking towards our H2 2024 recession call. After being bullish on risk assets last year, we are slowly turning more defensive.
An update to our outlooks for the Fed’s interest rate and balance sheet policies following this week’s remarks from Fed Governor Waller.
The Brazilian government and the central bank will be prioritizing growth over curbing the fiscal deficit and inflation. The outcome of an easy policy mix is that growth and inflation will be higher relative to market expectations, and real interest rates will drop considerably. We recommend that investors go long mid- and small-cap stocks on a pullback and inflation-linked bonds. However, foreign investors should hedge the currency risk.
This report examines if investors should worry about a balance of payments crisis in the next 3-to-6 months.
Decelerating nominal sales, a peaking credit cycle, and very high valuations - Indian stocks will not escape the carnage when risk assets globally begin to sell off.