BCA strategist urges shift from US markets to Europe, bitcoin

A leading strategist at BCA Research is calling on investors to reduce exposure to US assets and shift towards European markets and bitcoin, citing a widening divergence in global economic outlooks driven by US trade policy.

Dhaval Joshi, chief strategist at the brokerage, warned in a new report that inflationary pressures caused by former President Donald Trump’s tariffs are fuelling stagflation in the US while pushing deflationary risks abroad.

“Trump’s tariffs are inflationary for the US, but they are deflationary for the rest of the world,” Joshi wrote.

BCA recommends overweighting UK gilts over US Treasury, arguing that rising inflation in the US will dent investor appetite for dollar-denominated safe assets. Joshi likened the situation to the Brexit fallout in 2016, saying, “If Trump’s tariffs are ‘America’s Brexit’, then UK gilts will recoup ten years of underperformance versus US T-bonds.”

The firm also sees US equity valuations as overinflated by artificial intelligence hype and advises a shift into discounted European stocks, particularly in the healthcare sector.

German healthcare shares are highlighted as significantly undervalued compared to US peers, despite similar earnings growth.

Bitcoin is also gaining attention as a hedge against fiat instability, according to the report. BCA argues the cryptocurrency is benefiting from capital moving away from the US dollar, with Joshi suggesting his previous $200,000 price target may be conservative.

The report’s central recommendation is to structurally reduce US exposure and reallocate towards Europe and Bitcoin.

Attribution: Investing
Subediting: M. S. Salama