CoreMacro
BCA’s flagship global macro and investment strategy platform, helping investors anticipate regime shifts, connect signals across regions and asset classes, and navigate the world’s most difficult macro questions.
Global equities have reached extremes on multiple measures, none of which are reliable timing tools. But imbalances in economics and investing can build for far longer than rational analysis would predict - and usually unravel much faster than investors expect.
As long as the AI boom keeps booming, all other investment considerations will remain on the back burner. However, if the AI trade fizzles, this would expose deep-seated problems within the global economy, which could very well lead to an economic downturn as early as next year.
China's economy is slowing, but policymakers are unlikely to launch broad-based stimulus in H2. Meanwhile, the emergence of China's "Kimi moment" underscores Beijing's commitment to technological upgrading and the country's rapidly advancing AI capabilities.
As a short-term (0-3 months) trade, go long an equal-weighted basket of Chinese Investable and A-shares / short the KOSPI. This is a bet on mean reversion. We do not recommend that medium- and long-term investors implement this strategy.
We wish all our French clients Bonne Fête Nationale! The rest of the world knows the holiday by its other name, Bastille Day. It is fitting, therefore, that we publish today GeoMacro Beta report on the coming political earthquake in France.
We continue to overweight Mexican stocks, local bonds, sovereign credit, and currency within their respective EM portfolios. Also, stay long Mexican equities / short the S&P500.
