United States
This morning’s CPI report signals that the worst of the tariff impact on inflation may already be in the rearview mirror.
Congress will ultimately limit Trump from acting on his worst impulses, but his efforts to bypass those limits will cause market volatility.
Maintain a moderately defensive stance as a bold but constrained Trump keeps policy risk elevated. President Trump’s second mandate has been quite different from his first. Trump remains a disruptive and unorthodox actor deliberately challenging norms and…
Maintain a conservative tactical stance as subdued sentiment and slowing labor dynamics pose risks to consumption. The preliminary January University of Michigan Consumer Sentiment Index slightly beat expectations, rising to 54.0 from 52.9, reflecting an…
Our Global Asset Allocation strategists remain constructive on risk assets and continue to overweight cyclical sectors while recommending staying overweight tail risk protection as markets brace for tariff-related uncertainty. A forthcoming decision on US…
Expect limited near-term market impact but longer-run USD headwinds as challenges to Fed independence play out. The Federal Reserve was served grand jury subpoenas by the Department of Justice threatening a criminal indictment. Fed Chair Powell responded with…
Political risk will increasingly weigh on US markets. Our Chart of the Week comes from Mathieu Savary, BCA’s Chief DM ex. US Strategist. Mathieu shows that US corporate-sector employee compensation has slipped to a post-war low as a share of GDP, while…
Maintain long duration and favor curve steepeners as a fragile labor backdrop keeps the door open to further Fed cuts. The December US employment report sent mixed signals. Nonfarm payrolls rose 50k, missing estimates and slowing from a downwardly revised 56k…
Measures of labor market utilization improved in December, ruling out a January cut and significantly reducing the odds of a March cut.
Much like the 2000 episode, we expect this year to unfold in two stages: A “Great Rotation” from tech stocks to non-tech names in the first half of 2026 followed by a broad-based selloff in stocks in the second half on the back of a weakening US economy.