Latest from BCA Research

Special Report

In this report we examine how a variety of momentum strategies perform for different assets using moving average rules ranging from 1 day to 200 days. We find that mean-reversion strategies work best for equities and bonds, while trend-following strategies work best for commodities and, to a lesser extent, currencies.

Silver’s short squeeze and stretched technicals warn of a potential tactical pullback.

Special Report

This week’s Special Report evaluates the reward and risk in corporate bonds. We address the question of whether low expected excess returns today are justified by low risk or an example of overvaluation.

The Fed is undergoing a regime-change in which the primacy of price stability is displaced by the primacy of ultra-low real rates. This will structurally underpin real assets such as gold, cryptocurrencies, and stocks.

The denizens of GeoMacro strategy have remained bullish into October, despite our gut telling us that the equity rally has overextended itself on a technical basis. On cue, markets ripped our face off with a single missive from the Twitterer-in-Chief. While we scoff at the idea that the President will raise tariffs on China by 100%, the speed of the unwind of the "everything trade" that Friday suggests that market dynamics are not great.

Broad GenAI adoption and monetization, alongside falling inference costs, should make hyperscalers’ and enterprise investments worthwhile. While the GenAI boom echoes the dot-com era, it differs in key ways: Valuations are elevated but not extreme, and the rally is still underpinned by solid earnings growth. With few warning signs flashing red, the bull market likely has further to run, though a period of consolidation is overdue.

Special Report

The structural demand base for electricity is expanding, requiring massive investment in grid capacity, storage solutions, and renewable generation. For investors, this trend highlights long-duration opportunities in utilities as electricity responds to the ever-growing needs of data centers and becomes the backbone of Europe’s decarbonized growth model.

President Trump has threatened to cancel his planned meeting with President Xi Jinping on October 31 in South Korea at the Asia-Pacific Economic Cooperation summit. Responding to the October 9 announcement by Beijing that it was imposing new restrictions on refined rare earth minerals – and technology used to refine them – President Trump suggested that a massive increase in tariffs on China may be coming. Markets have reacted sharply to President Trump’s rhetoric, with a significant selloff in stocks.

The belief that net portfolio outflows out of the US will fuel EM assets is a common but misguided narrative. If the US starts experiencing net capital outflows, it would need to run a current account surplus. A shift in the US current account from deficit to surplus would be devastating for the global economy in general and EM in particular.

A world of political churn favors safe havens — buy yen, stay overweight US stocks, and avoid chasing the fragile rally in China.