United States
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…
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…
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…
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…
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.
Expect oil to keep trending lower on macro fundamentals, not on increased Venezuelan production. In the aftermath of US intervention in Venezuela and at the start of a midterm year, President Trump said he wants oil prices down to $50/bbl. One channel would…
Our Portfolio Allocation Summary for January 2026.
Stay constructive on European defense stocks and increase strategic exposure to industrial metals as geopolitical priorities reassert themselves. Following the capture of Venezuelan President Maduro, top US officials seem to confirm that President Trump is…
Maintain long duration and favor tactical curve steepeners as the JOLTS data show no evidence of a labor-market re-acceleration. The November US JOLTS report sent mixed signals. Job openings fell more than expected to 7.15 m from 7.67 m in October. Quits came…