Latest from BCA Research

Special Report

We enter 2024 as we were across the last four months of 2023, tactically equal weight across the board until the S&P 500 rally is complete and we gain a better entry point for underweighting equities and overweighting fixed income.

Treasury yields will sketch out a range between now and Q1 2024, with the upside determined by inflation and the downside determined by labor markets.

Special Report

The next dollar into Private Equity carries more time and opportunity cost risk. We do not see a high risk of permanent capital loss for the next vintages; existing vintages we do. While our primary focus revolves around the next dollar, it is valuable to comprehend the risks associated with current investments made through yesterday's allocations. In this report we delve into risks pertaining to dollars invested in the past and those earmarked for the future, with a special emphasis on Buyouts.

In this Insight, we discuss the outlook for monetary policy in New Zealand after this week’s RBNZ policy meeting, and introduce related fixed income and currency trade ideas.

Inflation won’t fall fast enough for the Fed to cut rates preemptively before recession arrives. The risk/rewards balance is unfavorable for risk assets. Stay overweight bonds versus equities.

In this insight we provide links to watchlists for 15 MSCI country and 11 US GICS Sector ETFs. Clients can follow the watchlists to use them in the Screener tool and receive regular updates.

The recent increase in Korean exports will likely prove to be a mid-cycle rebound within a cyclical downtrend. Korea’s households and enterprises are among the most indebted globally, and their debt service ratio is among the highest in the world. Korea’s 10-year bond yields have peaked. We discuss opportunities in Korean stocks as well as in fixed income and currency markets.

In our simulations of fairly deep global recessions averaging -1.5% in 2024 global GDP growth, we expect OPEC 2.0 to reduce output enough to offset lost demand. Even so, we find oil prices drop ~ $22/bbl – from ~ $100/bbl in 1H24 to ~ $78/bbl in 2H24. We remain long the XOP and COMT ETFs to retain oil and commodity exposures.

Our political forecasting scored wins in 2023 but we failed to capitalize on it adequately in our trade recommendations.

A cyclical recovery in China’s economy is still not imminent. The PBoC has tightened interbank liquidity to stabilize the exchange rate since late August. This does not bode well for the real economy. The uptick in onshore bond yields and the RMB’s appreciation will be transient. Equity investors should stay cautious.