Latest from BCA Research
Stock market valuations are moving as a near-perfect mirror image of the US real interest rate, meaning that the Fed is underpinning the stock market. But if the market stopped believing in AI-driven profits growth, valuations would collapse, irrespective of the Fed’s efforts to underpin them. When might this happen? Plus, two new tactical trades are: long BTC versus gold; and overweight industrials.
What should investors take from this flurry of diplomatic activity ahead of the US Thanksgiving holiday?
The RBNZ has concluded its aggressive easing blitz. With New Zealand economy finally showing signs of life, both the kiwi and local rates now look ripe for a reversal.
The odds have risen that we have reached a “Metaverse Moment” – a situation where investors punish AI companies for increasing capex. This warrants greater caution towards AI stocks specifically, and the broader S&P 500 more generally.
Investors are starting to price an end to the conflict in Ukraine as President Trump’s team puts on a full court press with the intention of replicating the successful peace negotiations in the Middle East.
China’s economy is weakening across the board as global risk-off hits equities. With housing conditions worsening and exports contracting—a perfect storm—Beijing faces mounting pressure to deliver stronger, housing-focused stimulus.
Q3 results were strong but failed to impress investors, and Q4 will likely prove more challenging. Beneath the surface, earnings diverged sharply: Firms catering to affluent consumers maintained solid momentum, while those reliant on the mass market lagged. We remain equal weight Consumer Services and underweight Consumer Staples.