Economy
The Qatar-Saudi Arabia rapprochement is positive for the medium-term outlook for Arab Gulf economies and stocks. Qatar managed to survive the air land and sea blockade by rerouting flights through Iran (with a $100 million/year price tag) and strengthening…
The reality that the market rally will become more volatile (see Indicator Spotlight) does not preclude a meaningful outperformance of EM equities relative to the US. In fact, BCA Research expects EM equities to perform in line with the EAFE benchmark and…
Both a large increase in multiples and a massive upgrade of earnings revisions following their Q1 2020 collapse powered the great market surge since last March. These two forces are set to fade, leaving the rally in a much more precarious position. …
The December ISM Manufacturing PMI rose to 60.7 from 57.5 versus expectations of a decline to 56.8, corroborating evidence that the economy has grown somewhat desensitized from pandemic developments. This is consistent with the message from Monday’s strong US…
According to BCA Research’s Global Asset Allocation Strategy service, a rapid rollout of vaccines means that the economy should be on track to return to near-normality by the second half of 2021. Therefore, the key thing for investors to think about is what…
The reflation trade remained the dominant theme for markets this December. The dollar suffered the largest negative abnormal returns of all the major asset classes while EM equities and gold offered the strongest risk-adjusted performance. Surprisingly,…
Can the dollar weakness continue in 2021? Economic forces suggest that the most likely outcome is further depreciation. The dollar is a counter-cyclical currency and the continued recovery this year will weigh on the Greenback. Moreover, the strength of US…
The December Global Manufacturing PMI came in at 53.8, unchanged from the prior month. Increases in input prices and to a lesser extent output prices supported the overall index and reflect stretched global supply chains, which have caused delays and…
Bitcoin prices have experienced a spectacular rise since December, hitting an all-time high above $34,500 on Sunday before declining to hover around $31,000. However, Bitcoin’s “fractal dimension” is flashing a warning sign. With a reading near 1.25, it is…
BCA Research’s US Bond Strategy service’s base case view is that the eventual pace of Fed tightening will be determined by inflation expectations and that no lift-off will happen until core PCE is above 2% and unemployment near 4%. However, one wildcard could…