Insights

Chief Strategists Matt Gertken and Roukaya Ibrahim and Jesse Kuri discussed:

• Presidents Trump and Xi Jinping agreed to expand their trade truce, as both face challenges, not least in the Strait of Hormuz.
• But China is not yet willing to apply pressure on Iran to enable shipping to resume in the strait. Only the US and Iran have the physical power necessary to resume shipping.
• Trump's attempt to negotiate a quick deal with Iran has not borne fruit, though negotiations are not yet dead.
• Faltering diplomacy implies a new round of hostilities over the coming days and weeks.
• Hormuz is likely to remain shut and attacks will likely increase over the coming month.
• In late June the world will start to hit constraints from physical oil inventory drawdowns.
• The global economy will increasingly see demand destruction as a result of elevated commodity prices.
• Global financial markets are increasingly disconnected from the underlying threat to the economy.

Jeremie and Robert discussed:

• Has the energy shock caused irreversible damage to the European economy?
• Central banks so far refrained from hiking. Will they continue to stay put?
• How is the energy shock affecting Europe relative to the US? What are the equity, fixed income, and currency implications?

In this webcast Ryan discussed the outlook for US inflation and consider whether rising consumer prices will force the Fed to hike rates in the coming months. The Webcast addressed the following questions:

• Will the oil price shock have only a temporary impact on US inflation, or will it send consumer prices sustainably higher?
• Is the US labor market heating up or cooling off?
• What economic scenarios would push the Fed toward rate hikes or rate cuts?
• Which US fixed income sectors stand to profit from an extended period of on-hold Fed policy?

Chief Strategists Marko Papic, Matt Gertken and Roukaya Ibrahim discussed:

• President Trump heads to China this week for critical talks with Xi Jinping that will focus on the war in Iran and global stability.
• If the US cannot offer significant strategic concessions for China's sphere of influence, then China may not join the pressure campaign against Iran.
• Meanwhile the "kinetic equilibrium" in the Persian Gulf faces renewed threats as the US and Iran trade barbs over how to restart shipping.
• The good news is that both sides are trading proposals — and the number of attacks has tended to decline since the April ceasefire.
• The bad news is that Iran remains unwilling to abandon its nuclear program, the US maintains its blockade, and Iran will attack US naval escorts of commercial ships.
• What will come of the US-China talks? Will Iran and the US manage to restart shipping? Can global financial markets continue to weather the Hormuz shock?

Please join BCA Research Strategists, Matt Gertken, Yushu Ma and Jesse Kuri for a Webcast on the US Midterms.

Wednesday, May 13
10:30 AM EDT | 3:30 PM BST |4:30 PM CEST 

• Midterm elections occur every four years and thus constitute a normal risk, not significant uncertainty.
• But the midterms matter this year because they constrain the Trump administration's foreign policy, which threatens the global economy.
• The midterms will also act as a barometer on US public opinion and the likelihood of another massive reversal of national policy in 2028.
• We revised our quantitative election models to give a read on what range of outcomes to expect for the House and Senate.
• With this information, investors can begin to envision the next twists and turns in market-relevant US policy.
• We will also discuss President Trump's "lame duck" status after the midterms and the investment implications.

BCA Chief Strategists, Mathieu Savary, Roukaya Ibrahim, and Noah Weisberger looked at the latest developments in the Strait of Hormuz and the implications for global financial markets.

Topics discussed:

• The Strait of Hormuz remains closed, and energy markets are tightening again. Is the shock being underpriced?
• What would a sustained disruption mean for the global growth–inflation trade-off? Is stagflation risk creeping back?
• Within commodities, where is the real asymmetry now? What’s crowded, and what still offers upside?
• Can strategic reserve releases truly cap the rally, or do they just delay the adjustment?
• Equities have remained resilient. Are markets looking through the shock, or misreading it?
• Where is the tipping point: how much further can oil rise before equities reprice meaningfully?
• If crude continues higher, which sectors and factors offer the most convex exposure, not just beta?
• If flows normalize and oil rolls over, where does leadership rotate, and how quickly?

US Equity Strategy Webcast Series: Noah Holds Barred - Episode 2

Noah and Jason discussed:

• What earnings, revisions and expectations are telling us now
• The latest read on Tech revenues, capex, and demand for AI
• Why we are long Software
• The outlook for margins: Macro headwinds vs. AI
• Key feedback and pushback from 32 client meetings & 34 Lunch and Dinner attendees:
  • The impact of AI IPOs, consumer spending trends, Utilities underweight