BCA Research

What sets BCA Research apart?    → We are independent. We aren’t beholden to any portfolio or agenda and focus on delivering accurate, evidenced foresight to our clients.    → We think differently. We have a track record of non-consensus thinking and give our strategists the freedom to make bold calls that go against the tide. → We are driven by our own unique set of values. We don’t cherry-pick charts to fit a narrative. When judgement calls are needed, we connect the dots, so you don’t have to drown in the details.   These are what have given us staying power over 75 years. And while we continue to innovate to deliver for our clients, we will remain true to these core tenets.    Watch the video below to find out more: ⬇️ #BCAResearch #macroeconomics #macro 

📈 BCA's Chart Of The Week What’s The Outlook For European Industrials? Our Chart Of The Week comes from Mathieu Savary, CFA, Chief Strategist of our European Investment Strategy service. Mathieu sees a dimming outlook for European industrial stocks in the near term. The sector has been a top performer in Europe this cycle, supported by its quality attributes and earnings growth. However, headwinds are emerging: · Plunging Capex Intentions: Falling European and US investment plans signal weaker profits ahead. · Eroding Quality: Interest coverage is declining despite strong cash flows, pressuring margins, ROE, and sector quality. · Expensive Valuations: Record multiples leave no valuation cushion. BCA expects a significant pullback in European industrials, adding to weakness in European equities, particularly cyclical stocks. Want more insights from Mathieu? Contact us here: https://bit.ly/40Tz6jl #Markets #EuropeanIndustrials

At BCA Research, we recently argued that Spain's outperformance was supported by specific macroeconomic tailwinds that may not be seen again or repeated. Granted some reforms have contributed to it, but they cannot alone explain the performance of Spain. https://lnkd.in/eFJxdX2t

Back in 2022, when most pundits were expecting an imminent US recession, Peter Berezin was one of the few strategists arguing that growth would surprise on the upside. Then, in 2023, he accurately predicted an immaculate disinflation. This kept him bullish on stocks. Now, however, Peter thinks the US will fall into recession in 2025 and that the S&P 500 will end the year at 4450. Find out why he is now the most bearish forecaster — by far — in the Bloomberg survey.    To get a sample of Peter’s latest report, click here: https://lnkd.in/dGRg5SWH #Markets #InvestmentStrategy #GlobalOutlook

Business Insider's Kelly Cloonan recently sat down with Chief US Investment Strategist, Doug Peta, CFA, to better understand why stocks are headed for a bear market in the first half of 2025. Doug's 3 drivers? 1. Slowdown in consumer momentum 2. Labor market softening 3. Heightened risks from historically high stock valuations Doug expands on these points in this full article: https://lnkd.in/eNSmwM3B Interested in more insights from BCA? Contact us here: https://bit.ly/40Tz6jl #Markets #Stocks #Macro

Chief European Investment Strategist, Mathieu Savary, CFA, says on Reuters, "The ECB is sticking to the script. Inflation is slowing, leading indicators suggest wage growth will decelerate, and growth is soggy but not catastrophic. As a result, maintaining a consistent pace of easing is appropriate, and allows to keep ammunitions in the chamber if a trade war were to emerge next year. Ultimately, rates still have significant downside and will settle below 1.5%." Read the full article here: https://lnkd.in/ehVSCaK7 #ECB #InterestRates

Thank you to all who attended our presentation in São Paulo last week with Chief Emerging Markets Strategist, Arthur Budaghyan. It was an incredible opportunity to connect and share insights with you all. To learn more about upcoming events with our strategists, please reach out to us at contactbca@bcaresearch.com or click here: https://lnkd.in/ehX5hDtG #EmergingMarkets #Macro

Six years ago, the European Union introduced a landmark regulation named "MiFID II", forcing investment research providers to adapt to a new landscape. Now, both the EU and the UK are considering amending and winding down key pieces of the directive, and research providers – including BCA – must evolve in response. Read my blog below to find out more: ⬇️ #BCAResearch

📈 𝗦𝗵𝗼𝘂𝗹𝗱 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗳𝗮𝗱𝗲 𝘁𝗵𝗲 𝗽𝗼𝘀𝘁-𝗲𝗹𝗲𝗰𝘁𝗶𝗼𝗻 𝗲𝘂𝗽𝗵𝗼𝗿𝗶𝗮? The November NFIB small business index beat economists' forecasts thanks to measures of expectations. The outlook for general business conditions over the next six months surged a whopping 39 percentage points. We would fade those expectations. Despite the possibility confidence could feed on itself and lead to more spending, confidence based on prospective political changes will likely disappoint. The 2017 𝘛𝘢𝘹 𝘊𝘶𝘵𝘴 𝘈𝘯𝘥 𝘑𝘰𝘣𝘴 𝘈𝘤𝘵 didn't lead to an acceleration in employment or investment. Furthermore, trade tensions will be a drag for global growth. The post-election optimism motivates our tactical overweight on US assets vs. the rest of the world. However, it won't last, and investors should position global portfolios defensively for 2025, as we expect a global recession.  BCA Research #NFIB #AssetAllocation #Macro Clients interested in reading our Daily Insights can do it here: https://lnkd.in/e-CHV4B2

Four years after the pandemic, it feels like there has not been enough self-reflection of that fascinating period in history. The broad societal impacts are not for me to opine upon (I think… I hope), but there is one lesson for the world of finance that continues to go ignored. That objective reality is far less relevant than its second order effects. Equities bottomed on March 23, 2020 during the pandemic, merely weeks into the calamity itself. Why? Because markets are reflexive and create their own future path as policymakers respond. Investors have to react to these second order effects, not the objective reality. This is difficult and risky as policy responses are subjective, initially at least. But that is the skill required to be a macro investor. This is a lesson that almost every geopolitical crisis has thought us, not just the pandemic. Many professional investors missed the vicious rally in 2020, shaking their fist at the “retail-led silliness.” But the amateurs bested even the greatest Macro Mavens. Whether by luck or skill, they realized that the policy response to the pandemic would dwarf the impacts of the calamity itself. Today, many are over-indexing on the policies that the Trump administration will enact. I am personally in a minority on the administration’s ability to expand the US deficit (and therefore expect US growth to somewhat surprise to the downside) or its willingness to wage a prolonged trade war against China. What we ought to be thinking about is what are the second order effects of Trump’s policies. In Europe, there is an impetus for productivity-enhancing reforms, which could be a positive. This is somewhat amusing as it is not entirely clear whether Europe has truly fallen behind the US in productivity or whether the surge in US output-per-hour-worked is simply a combination of fiscal profligacy and unchecked migration. In Germany, specifically, the traditionally conservative Bundesbank is calling for more investment. The fiscally conservative CDU may be just what the country needs. If “only Nixon could go to China,” perhaps it is only Friedrich Merz who can tinker with the debt break. In China, the December Politburo meeting has reaffirmed the rhetorical shift from September 26, with a clear reaffirmation that Beijing intends to intervene to prop up the economy further in 2025. Right now, the consensus view among investors is that the "America First" president will give us "America First" asset performance. But that has already been going on for 16 years. And it is not entirely clear that President Trump was voted into office to just deliver more nominal GDP growth. Voters want less inflation, not more growth. Meanwhile, the pessimism regarding the rest-of-the-world RoW is at an extreme, largely due to the notion that policymakers outside of the US are destined to go gently into that good night. Sounds like a setup for a surprising 2025.