CoreMacro
BCA’s flagship global macro and investment strategy platform, helping investors anticipate regime shifts, connect signals across regions and asset classes, and navigate the world’s most difficult macro questions.
This report analyzes China’s persistent deflation, which is rooted in supply-side forces. Consumption support will be slow and incremental, keeping deflationary pressures elevated for the next 6–12 months.
Trump’s immigration policies are protecting the US economy from a sharp rise in unemployment but steering it into a ‘mini stagflation’. Plus: a new tactical trade is to underweight global technology (IXN).
MacroQuant’s US equity z-score is dangerously close to the -1 threshold. Moves below that threshold have reliably coincided with equity bear markets in the past. As such, MacroQuant recommends an underweight on stocks, offset by an overweight on bonds and cash.
Investors should modestly underweight equities in their portfolios and look to turn more aggressively defensive once the whites of the recession’s eyes are visible. We think that will happen within the next few months.
The pound will reach $1.60 if ‘America’s Brexit’ cancels out ‘Britain’s Brexit’. Meanwhile, the flight from the fiat dollar to non-fiat bitcoin will enable the preeminent cryptocurrency to reach $200,000+.
The EM EPS recovery has been narrow, solely driven by TMT stocks in China, Korea, and Taiwan. EM corporate profits are set to contract in the next six to nine months. Unlike in the past, US dollar weakness will be deflationary, not reflationary, for EM share prices.
