Peter Berezin has released his latest research report chock full of interesting observations and instructive charts.
The Chief Global Strategist of BCA Research focuses on what he sees as global growth momentum shifting from the U.S. to the rest of the world.
Berezin keys in on the weakening U.S. dollar, the strength of other currencies, and where the equity investment opportunities are.
We’ve plucked the hi-lights and a couple of charts to give you some flavour from this report.
- Berezin says the U.S. dollar, after staging a a bit of a rebound in the first quarter, has resumed its weakening trend.
- BCA expects the greenback to trend lower over the next 12 months, that’s as global growth momentum rotates from the U.S. to the rest of the world.
- Berezin also points to the Fed maintaining its ultra-accommodative monetary stance, and as the U.S. struggles to finance its ever-growing trade deficit.
- The report says China will provide continue to provide fiscal and monetary support for its economy, which will help commodity prices, the yuan, and other emerging market currencies.
- As for the Canadian dollar, Berezin believes the loonie should strengthen as the Bank of Canada continues to reduce its balance sheet with the goal of hiking rates by the end of next year.
- Berezin sees EUR/USD on track to rise to 1.25 by the end of 2021, with the British pound strengthening against the euro.
Berezin concludes, as he did during our interview a few months ago, that value stocks tend to do best in a weak dollar environment, as evidenced in the chart below.
He recommends investors overweight cyclicals, non-U.S., and value stocks over the next year.
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