Latest from BCA Research

Banks have had an amazing run, and while such strong performance is unlikely to repeat, there is still oomph left in the trade thanks to a more favorable regulatory environment, stronger demand for loans, a steeper yield curve, and a strong pipeline of capital market activity. Key risks are further tightening of monetary policy and an increase in bad loans. We reiterate our overweight on Capital Markets, Diversified Banks, and Regional Banks.

President Trump is only the second president to have won, lost, and won again in US history, so today’s inaugural address was unlike any other since Grover Cleveland in 1893.

President Trump is about to be inaugurated. Investors often assume all his policies will hurt Europe, but the reality is more nuanced.

This week’s report looks at the US dollar, from the lens of one very cyclical currency – the Australian dollar.

We examine Treasury market valuation and look for indicators that could help us time the next peak in yields. We also update the forecasts from our Treasury yield model.

This week, our screeners cover views on Trump 2.0, defensive US equity sectors, and a pullback in Singapore equities. Our first screener aims to hedge longer term inflation risks that Trump 2.0 will likely generate, targeting US equities that are highly correlated with future inflation expectations. Our second screener identifies several defensive sectors that are worth consideration, in case of a tactical pullback in US equities. Lastly, we pick out Singapore stocks that are cheap and high safety, should a pullback occur in the local bourse given weakening macro and technical conditions.

Special Report

Private Real Estate and Public REITs differ beyond just being liquid or illiquid. Looking through surface-level metrics uncovers valuable choices for investors. When analyzing the opportunity for today’s next dollar, Private Real Estate is more attractive.

Special Report

Inauguration Day or shortly thereafter will see either a global tariff of 10% or targeted but substantial tariffs on China, Mexico, and Canada. Treasury yields will rise on tax cuts, the dollar will stay strong, yet oil will also continue to rally, causing equity volatility in the near term.

Political instability combined with the maths of debt sustainability is much more concerning in France than in either the UK or the US. Go long UK gilts versus French OATs and go tactically long GBP/USD.

Today, we publish our Quarterly Model Bond Portfolio report. We review the performance of the portfolio in 2024 and discuss how to best position a global fixed income portfolio following the sharp rise in yields during the last months.