Strategy Report

The Message From Commodities

12 Feb 2016

by Peter Berezin, Chief Strategist

Plunging commodities have been driven by increased supply and falling investor demand, not a major downshift in physical demand. Stay neutral global equities. The earnings outlook remains uninspiring, but bottoming oil prices and continued monetary stimulus support valuations. The selloff in global bank shares reflects NIRP-related "income statement worries", not "balance sheet concerns" linked to deteriorating credit quality. Downgrade Treasury notes to neutral. The rally in bonds has brought 10-year yields near our long-standing, out-of-consensus target of 1.5%.

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BCA Research | Global Investment Strategy

As BCA Research’s flagship publication, the Global Investment Strategy service provides macro-based investment recommendations across all asset classes, geographies, and time horizons.