Latest from BCA Research
Europe credit flows are stabilizing, hence a major drag on the region’s growth will dissipate. What does this development imply for European equities?
Our reaction to this morning’s employment report and bond market moves.
In this report, we review our trade recommendations based on incoming data in the last month.
Climbing US bond yields, alongside higher oil prices, might spoil the party for global risk assets. There are budding cracks in EM domestic bonds, and even though we like this asset class in the long run, investors exposed to it should reduce their positions for now.
The BCA Score L/S posted a positive return in March with the Value factor leading the way.
Copper markets are fast approaching a price breakout, as Chinese smelters scramble to find ore to meet increasing refined-copper demand in the wake of a global manufacturing rebound. We are holding fast to our expectation of $4.50/lb (COMEX) this year. We remain long the XME ETF to retain exposure to copper miners and refiners, and the COMT ETF to retain exposure to commodity flat price and the copper backwardation we expect.
Colombia has fallen from grace in terms of its healthy macroeconomic fundamentals, business-friendly government policies, and conservative fiscal stances. The economy is experiencing stagflation, public finances are deteriorating rapidly, and political uncertainty will persist. Underweight Colombia across all financial markets relative to their EM benchmarks, and short Colombian bank stocks and the currency versus their Chilean counterparts.
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This month the Equity Score flatted out after a sharp increase last month. Three out of the four model inputs driving the sector views are near neutral, suggesting we may see a rotation in sector preference over the next few months. The Style Indicator continues to align with Large-Cap Value.