AI and Markets
Our GeoMacro strategists stay overweight equities, expecting the bull market to run further. The July earnings season has confirmed the AI capex engine is still running hot, just as Iran-US tensions peaked. Cloud revenue at the three largest hyperscalers grew…
Our Global Asset Allocation strategists see the return on AI capex now becoming visible in reported results, clearing the way for the bull market to move higher. Investors have stayed deeply skeptical about the profitability of the buildout, yet Q2 earnings…
China's latest semiconductor and AI developments strengthen the case for a long China Investable and A shares/short KOSPI trade over the coming months. Last week, China reportedly began producing domestic immersion DUV lithography machines, the country's most…
Investors have remained very skeptical about the profitability of the AI buildout. However, this earnings season the ROI has begun to show up, giving the bull market a green light to go higher. Remain overweight equities and continue to favor the hyperscalers.
Our clients remain bullish on AI stocks. This week's poll asked respondents for their outlook on AI equities and the main reason behind it. A combined 71% of BCA clients picked a bullish rationale, led by scarce compute at 59%, against 29% who were bearish.…
Our clients see gold as the best hedge against an AI unwind. In last week’s poll, 59% of BCA clients chose gold, versus 40% on LinkedIn and 36% on X. Social media respondents leaned more toward bonds: 39% on LinkedIn and 52% on X favored fixed income,…
Our Global Investment strategists argue that buying into industries facing supply shortages is a reliable way to generate profits, provided investors exit before the market prices in relief. They note this pattern held through the pandemic, Russia's invasion…
This report addresses five frequently asked questions from our Greater China clients over the past few months.
BCA’s Global Investment Strategy team challenges Fed Chair Kevin Warsh's view that AI will prove disinflationary, particularly on the near-term inflation impact. Our colleagues argue AI is currently pushing up costs across a range of inputs, including power…
The AI boom will increase inflation in the near term and could also raise it over the long term. The Fed’s reluctance to hike rates is understandable, but it risks amplifying what may already be a brewing stock market bubble.