BCA turns neutral on U.S. stocks, following HSBC

Investing.com -- BCA Research has shifted its stance on U.S. equities to neutral, mirroring a similar move by HSBC on thursday, after revised employment data showed the labour market had been far weaker than previously understood.

In a new note, BCA Research said the annual payroll revisions revealed that “2025 payrolls expansion was even stingier and more narrowly concentrated than previously estimated.”

The firm highlighted that payroll growth “fell below our stall-speed threshold in August 2024, not June 2025,” yet corporate earnings and the broader economy “sailed on without a hitch.”

According to BCA, structural changes, including wealth gains and a stronger social safety net, have weakened “compensation’s influence over consumption,” helping households weather slow hiring.

Despite spending outpacing income for much of last year, BCA Research said “a surge in income narrowed the gap in January,” adding that the One Big Beautiful Bill Act “should help narrow it further as taxpayers receive refunds.”

Against this backdrop, BCA Research is “less concerned about an impending US recession” but has nonetheless adjusted its global allocations.

The firm wrote: “We have downgraded the US to equal weight and upgraded the Euro Area to equal weight in global equity portfolios.” It also cut the U.S. dollar to underweight while lifting the euro to equal weight.

In fixed income, BCA Research has removed its preference for rates over credit, reflecting what it describes as an economy where “the expansion remains intact” despite softer job growth.

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