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BCA Indicators/Model

China: Easing Monetary Conditions Have Not Led To Credit Growth Revival
Despite the underwhelming economic recovery, Chinese authorities remain reluctant to open wide stimulus taps as much as they have in past economic downturns. This is corroborated by the PBoC’s marginal interest rate cut last Tuesday. The one-year medium-term…
Daily Insights
CCP Tops Oil Demand Risks; KSA, Russia Top Supply Risks

We continue to expect China to deploy stronger fiscal and monetary stimulus to avoid prolonged deflation brought about by a liquidity trap and sub-zero growth. All the same, a lower-growth risk has been added to our ensemble forecast. We expect Brent to trade at $94/bbl in 2H23, and $120/bbl next year. WTI will trade $4 – $6/bbl lower.

Commodity & Energy Strategy
China-Related Assets: Not Yet Priced For A Further Slowdown In China
The above chart illustrates the BCA Market-Based China Growth Indicator, which is made up of 17 series grouped into four asset class subcomponents: currencies, commodities, equities, and rates/fixed-income. The purpose of the indicator is to act as a broad…
Daily Insights
BCA’s Monetary Indicator: Less Constructive Than Meets The Eye
In a recently published report, BCA’s Bank Credit Analyst service reviewed the BCA Valuation Index, alongside three other US equity indicators which are published in Section III of each month’s report. The other indices included in our suite of equity…
Daily Insights
The Low-Hanging Fruit Has Been Picked
BCA Research's US Investment Strategy service’s yearlong recommendation to overweight equities was founded on its high-conviction view that investors were underestimating American consumers’ resources and resolve. The consensus pooh-poohed the mountain of…
Daily Insights
US Bank Stocks: The Bad News Is Priced In
On Monday, Moody’s downgraded the credit ratings of 10 small to mid-sized US banks and placed some of the biggest US banks on downgrade watch. The latter include Bank of New York Mellon, US Bancorp, State Street, and Truist Financial. The decision follows…
Daily Insights
The Death Of T.I.N.A.: Income Edition
During the last economic expansion, a structurally overweight allocation to stocks was at least partially warranted by the idea that “There Is No Alternative” – or “T.I.N.A.” During the last expansion, very accommodative monetary policy significantly reduced…
Daily Insights
Not Immaculate (GeoRisk Update)

The global economy will not enjoy an “immaculate disinflation” but will suffer a very maculate one due to China’s growth slowdown and restrictive monetary policy in the developed world. Investors should stay overweight low-beta assets.

Geopolitical Strategy by Matt Gertken
GBP Is At Risk Of A Pullback
According to BCA Research’s Global Fixed Income and Foreign Exchange Strategy services, the British pound is overbought in the near-term and is at risk of a pullback on easing rate expectations, but this will represent a medium-term buying opportunity. The…
Daily Insights
What Ails China Is Not What Most Investors Think

China’s extremely high savings rate is the real culprit behind its current economic woes. The authorities have been slow to stimulate the economy, and the risks of “Japanification” have increased. For now, the fact that China is exporting deflation is not such a bad thing. However, if global recession risks were to flare up again, a lethargic Chinese economy would be a cause for concern. Chinese stocks are quite cheap but lack a clear catalyst to move higher. Favor EM markets where earnings and sales estimates have been moving up lately.

Global Investment Strategy by Peter Berezin

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