In Romania, large fiscal and current account deficits, high inflation, negative real rates, an overvalued exchange rate, and deteriorating growth point to budding currency devaluation. Investors should short the Romanian currency versus the euro and underweight Romanian local bonds, equities, and so...
Tech, and increasingly the market, is moving from a cash-return regime to a reinvestment regime. After the GFC, investors rewarded companies that returned cash to investors. In the AI cycle, they are rewarding companies that put that cash back to work. This is not just a story of falling free cash f...
In Private Markets, yesterday’s winners often see outperformance fade. Top-quartile managers often regress toward the median as fund series mature. For investors evaluating the next Real Estate or Private Equity manager: Bias toward underweighting Funds V and beyond....
I spent the last week in London, speaking to a wide array of BCA Research clients. Throughout the early part of the week, well connected friends and sources in the Middle East warned me that a renewed US attack on Iran was imminent (by Friday, May 22, after the market close, bien sûr). Several clien...
Against the earnings-versus-everything-else market backdrop, stellar earnings are easily outweighing elevated oil prices, rising yields and the increased probability that the Fed may hike rates before the year is out. US allocators should remain invested in equities....
Europe is sliding from stagflation toward recession as prolonged disruptions in the Strait of Hormuz weaken growth, labor markets, and supply chains while keeping inflation elevated. Even if a US-Iran deal is reached, limited fiscal support and rising food inflation leave the Euro Area increasingly ...
Our Private Markets & Alternatives strategists laid out a framework for evaluating private equity investments. While fund vehicles often last more than ten years, the assets they contain are held for much shorter periods; and it is those shorter periods that drive returns. Closed-end funds can run a...
Our Commodity strategists expect oil prices to move higher as de-escalation hopes fade and Strait of Hormuz supply risks reassert themselves. Recent volatility reflect headline-driven uncertainty, with markets swinging between prospects of an imminent Strait reopening and fears of ceasefire breakdow...
Our Global Investment strategists argue that AI could be as transformative as the Agricultural or Industrial Revolutions, but carries existential medium- to long-term risks. Both prior revolutions lifted GDP growth more than 30-fold versus the preceding epoch, and AI may prove similarly powerful. Th...
