Latest from BCA Research
Since the start of Israel’s military operations against Iran on June 12, we warned clients that there would be an epic opportunity to fade geopolitical risk premium by shorting oil. We did it here, here, and again here. Over the weekend, however, we lost our cool and suggested that there could be more risk premium to fade as Iran and the US danced the dance of re-retaliation following President Trump’s decision to attack Iran’s nuclear sites directly.
Imminent monetary and fiscal easing, along with resilient earnings growth, support a constructive outlook for equities. However, in the near term, significant tail risks persist. We recommend strengthening downside protection by lowering portfolio beta.
President Trump has announced on social media that the US has conducted air strikes against three Iranian nuclear sites, including the hardened (and underground) Fordow that Israel has been unable to penetrate.
The escalating Israel-Iran conflict has boosted oil prices. We are positioning for further geopolitical escalation, uncertainty, and the economic fallout through two strategies that benefit from both near- and long-term upside.
This week our three screeners explore: Equity trades across the Euro Zone focusing on Technicals and Sentiment; US Oil, Gas and Fuel stocks; and European Small Caps.
In this Insight, we highlight our strong conviction trades based on the central bank meetings held by the Bank of England, the Norges Bank, the Swiss National Bank and the Riksbank.
The pound will reach $1.60 if ‘America’s Brexit’ cancels out ‘Britain’s Brexit’. Meanwhile, the flight from the fiat dollar to non-fiat bitcoin will enable the preeminent cryptocurrency to reach $200,000+.
The Fed’s 2025 interest rate projections reveal two camps within the committee. One group looking for no rate cuts this year and another looking for 50-bps of easing. We think the second group’s forecast will turn out to be more accurate.