Recently, we have been inundated with client requests to update our analysis and incorporate the coronavirus epidemic to our adverse EPS scenario. The chart below shows that in our worst case scenario, EPS will contract by 2.41% in…
Highlights Chart 1Making New Lows While the number of daily new COVID-19 cases is falling in China, the virus is spreading rapidly to the rest of the world. It is now clear that the outbreak will not be contained, though…
Yesterday, BCA Research's US Equity Strategy service downgraded the S&P tech sector to underweight. Tech stocks are stretched, trading near two standard deviations above the historical time trend, a level that has marked three…
Highlights Portfolio Strategy It is still early to bottom fish, and trying to catch the proverbial falling knife does not interest us for cyclically oriented capital. Uncertainty surrounding the coronavirus epidemic and its effects on…
Highlights Supply constraints and unstoppable demand growth – the result of stricter regulations requiring higher loadings in autocatalysts to treat toxic pollution in automobile-engine emissions – will continue to push…
The malaise in global bourses intensified as the coronavirus epidemic is spreading like wildfire. The chart shows that the SPX and Google Trends searches worldwide for the word “coronavirus” are 100% inversely…
In this week’s report, we highlighted that from a technical perspective the SPX remained vulnerable. Specifically, its deviation from the 200-day moving average reached levels similar to the early-2018 blow-off top…
Highlights Portfolio Strategy Boeing’s 737 MAX grounding, China’s looming slowdown on the back of the coronavirus epidemic and weak industry operating metrics, all warrant a downgrade alert in the US aerospace index. Red…
Overweight Investors tend to overreact to events such as virus epidemics, but we deem that such fears typically create trading opportunities, especially in the hardest-hit sectors. Similar to hotels (that we upgraded to…