The strength in China’s post-pandemic policy support likely peaked in October. Interbank rates have normalized to their pre-pandemic levels and bond yields have risen sharply since May. The renewed emphasis on financial de-risking is…
According to BCA Research’s Global Asset Allocation service, equity valuations look compelling compared to bonds. The spread between the US cyclically adjusted earnings yield to the 10-year Treasury real yield has been…
Highlights Inflation Breakeven Trades: We are taking profits on our recommended inflation breakeven widening trades in Italy and Canada, as breakevens in both countries are no longer below the fair values implied by our models. We are…
Mr. X and his daughter, Ms. X, are long-time BCA clients who visit our office toward the end of each year to discuss the economic and financial market outlook for the year ahead. This report is an edited transcript of our recent…
In a previous Insight, we noted that the Fed’s adoption of an Average Inflation Target has likely created a new hedging reality for equity investors, and that cash is likely to be the least uncompelling diversifying asset…
The chart above presents a scatterplot of monthly total returns for the S&P 500 index and 10-year US Treasurys. The chart highlights that the relationship has been reliably negative over the past decade, meaning that the…
Highlights US Corporates: The decision by the US Treasury to let the Fed’s emergency lending programs expire does not sound the death knell for the bull market in US corporate debt. Credit markets are functioning normally and US…
According to BCA Research's US Bond Strategy service, weaker Q4 economic growth could cause Treasury yields to fall in the near-term, but the knowledge that a vaccine is coming in 2021 will limit the downside. Investors…
Please note that there will be no US Bond Strategy report next week. We will publish December’s Portfolio Allocation Summary on December 8th, followed by our Key Views For 2021 on December 15th and a Special Report titled “The…
We are publishing the November issue of Charts That Matter. The key message from the charts on the following pages is that investor sentiment on global growth is elevated and the reflation trade is a bit overstretched. As a result, risk…