BCA Research turns to a neutral stance on US stocks, following HSBC's lead

Investing.com - BCA Research has adjusted its stance on the U.S. stock market to neutral, echoing a similar move by HSBC on Thursday after revised employment data showed the labor market was much weaker than previously understood.

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In a new report, BCA Research stated that the annual wage data revisions show that “wage growth in 2025 is more modest than previously estimated and more concentrated in narrow sectors.”

The firm emphasized that wage growth “fell below our slowdown threshold in August 2024, not June 2025,” but corporate profits and the broader economy “continued to advance without hindrance.”

According to BCA, structural changes including wealth growth and a stronger social safety net have weakened “the impact of wages on consumption,” helping households through the hiring slowdown.

Despite most of last year’s spending exceeding income, BCA Research said that “a surge in income in January narrowed this gap,” and added that the “major good bill” should help further close the gap as taxpayers receive refunds.

Against this backdrop, BCA Research is “less concerned about an upcoming recession in the U.S.,” but has still adjusted its global allocations.

The firm wrote, “We have downgraded the U.S. to equal weight and upgraded the Eurozone to equal weight in our global equity portfolio.” It also downgraded the dollar to underweight and upgraded the euro to equal weight.

In fixed income, BCA Research has removed its preference for rates over credit, reflecting the economic situation described as “despite weak employment growth, expansion remains intact.”

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