Highlights The equity risk premium has turned negative for the first time since 2002. It follows that any significant rise in bond yields will cause risk-asset prices to collapse, quickly flipping any incipient inflationary shock into…
Our colleagues at BCA Research's Equity Analyzer team recently updated their MacroQuant model for equity investors. The model uses macroeconomic data to provide tactical investment recommendations and is calibrated to assist…
According to BCA Research's Geopolitical Strategy service, Iran is now the most pressing geopolitical risk in the short term. The world today stands at a critical juncture with regard to Iran and the unfinished business of…
Highlights A decline in the marginal propensity to spend out of both income and wealth over the past few decades generated a flood of excess savings. Facing a chronic shortfall of aggregate demand, central banks had no choice but to…
Highlights An Iran crisis is imminent. We still think a US-Iran détente is possible but our conviction is lower until Biden makes a successful show of force. Oil prices will be volatile. Fiscal drag is a risk to the cyclical…
Highlights Our willingness to spend money depends on which ‘mental account’ it occupies. Once windfall income enters our ‘savings mental account’, we will not spend it. Hence, the pandemic’s windfall…
The global manufacturing PMI slipped 1.3 points to a six-month low of 54.1 in August. The deterioration was broad-based. Among the economies with available data, nearly a third contracted which is an increase from a fourth of the…
The current deceleration in economic growth (see The Numbers) reflects two main factors. First, lofty economic growth rates following the initial pandemic slump in economic activity were ultimately unsustainable after the sharp…
The key decision for asset allocators is always at the asset-class level: Whether equities will outperform bonds or vice versa. Despite the decline in government bond yields since March, the stock/bond ratio - defined most…
The disruption of global supply chains continues to be a major concern, with measures of shipping container chartering rates not only at all-time highs but many orders of magnitude above regular levels. Booming global goods…