Latest from BCA Research
The Fed is unanimous in expecting a mild tightening cycle of no more than 75 bps, but that outcome is contingent on a rapid drop in core inflation in 2027.
In this screener report, we explore opportunities in duration-resilient large-cap Technology, emerging defense technology, and a conditional entry point into copper.
Concerns by the major AI companies that they are locked into a financially unsustainable arms race for AI dominance are likely playing as much a role in their newfound “go slow” approach as concerns over AI doom.
The world has descended into a full blown Doomer panic since the 27-year-old Anthropic engineer quit over the threat that AI would cause human extinction. Now-famous Jacob Coxon posted that “The people building AI earnestly believe that it could kill us all by the end of the decade. This is not a marketing stunt.”
The situation in the Middle East is becoming complicated. Over the past week, several events raise the odds that Brent prices could burst through their 2026 high of $126 per barrel.
Scott Bessent’s attempts to suppress yields while financing large twin deficits risk crashing foreign inflows, the dollar, US bonds, and equities. Without a major equity selloff or large-scale commercial bank purchases of Treasurys, the bond selloff will persist – producing a major equity drawdown and a lower dollar.
We remain constructive on US equities, but higher yields, slower EPS growth and heavy IPO issuance remain significant risks to valuations, leaving the path to our year-end target increasingly dependent on earnings. Tactically, there has already been a significant, but benign, compression in multiples, as earnings have outpaced prices. A well-communicated Fed hike could ease rather than intensify bond-market uncertainty.
August’s 0.3% increase in core CPI breaks inflation’s 3-month downtrend and is likely hot enough for the Fed to hike rates when it meets next week.