Latest from BCA Research

On October 15, speaking at the Economic Club of Chicago, Donald Trump called tariffs “the most beautiful word in the dictionary.” On Monday, he put those words into action by threatening to slap a 25% tariff on all imports from Canada and Mexico, and an additional 10% tariff on Chinese imports. Collectively, the three countries account for 45% of US imports.

The earnings season was good but failed to assuage investor concerns that earnings growth remains concentrated. Tepid earnings and sales beats were somewhat concerning. However, based on company commentaries, the US economy remains sound. While challenges remain, such as slowing global growth, a strong dollar, and weakness among lower-income consumers, companies see them as surmountable. The market expects earnings growth to broaden in 2025. We concur as long as there are no major disruptive events.

This week we conduct a thorough audit of our open positions by revisiting the original basis and subsequent performance of all 13 cyclical recommendations. Following the review, we recommend closing 6 of the 13 positions.

President Trump’s victory has injected a dose of uncertainty into the outlook for commodity markets. Most notably, the new administration’s energy policies are likely to be part of the early agenda. Changes in US domestic and foreign policies will also impact the outlooks for gold and industrial metals. In this Strategy Report we highlight the likely consequence of Trump’s election on the major commodities.

Corporate bond spreads have tightened significantly during the past month, even as the range of economic outcomes consistent with stable credit spreads narrows.

Special Report

North America Buyouts have been investors' favorite but the investing playbook needs rewriting. Now is the time to avoid the Core-Upper Middle Market and be aware of landmines in the Lower Middle Market. Investors should barbell their Buyout allocations in North America, preferring Large+ and Lower Middle Market.

October CPI numbers for Canada, the UK and Japan were released last week. This Strategy Insight examines the respective underlying drivers of inflation in those three economies and discusses the implications for monetary policy.

European assets and the euro have become oversold and are likely to rebound. Will this move be nothing more than a dead cat bounce leading to more weakness?