Refreshingly for a strategist, BCA's Marko Papic isn't reticent with his opinions and rarely sits on the fence.
Marko Papic is geopolitical and macrostrategist at BCA Research, hosts a podcast 'Geopolitical Cousins' and is a frequent commentator in various media
Rather than expressing concern about the Federal Reserve's autonomy, Papic told MarketWatch in an interview: "The Fed was never independent anyway." Instead of obsessing about what many observers believe is a chaotic approach to government, Papic maintains that "Donald Trump is very, very predictable."
To illustrate his point here, Papic expresses wonder that the markets were caught off guard by the 'Liberation Day' tariffs when Trump had promised such protectionist measures repeatedly throughout his electoral campaign.
Papic "violently disagrees" with the consensus that the ousting of Venezuela President Nicolas Maduro is bearish for oil (CL00). He reckons the dollar DXY could decline another 20% over the next few years. He contends the Supreme Court will almost certainly uphold the legality of Trump's tariffs this month.
That's enough contrarian to be getting on with for now.
Based in Los Angeles, Papic is the macro and geopolitical strategist at BCA Research, a podcast host and a frequent, invariably wry, contributor to X. He made headlines back in early 2025 when he referred to Donald Trump as a "human steepener" owing to the latter's likely impact omn the U.S. yield curve. Last week he published his GeoMacro Alpha Report, the annual outlook for 2026, and he made some typically bold calls. Most important for U.S investors is probably the tactical underweight call on U.S. equities he initiated.
The reason he's less enthusiastic than many on Wall Street is the difficulty that U.S. 10-year Treasury yields BX:TMUBMUSD10Y have encountered in going below 4%. Borrowing costs remain elevated and so Papic believes the economy will struggle as a consequence.
His year-end target for the S&P 500 SPX is just 7,500, roughly 7% above where it is now, but he thinks it may well dip below current levels before making it there.
More concerning for asset allocators, however, is Papic's bearish call on the dollar. Pressure on the Fed to lower rates will weigh on the currency, he said. Papic told MarketWatch that the U.S. is "skating on thin ice" if it resorts to monetary policy to stimulate the economy in advance of midterm elections come November, and in this environment "something has to break: the dollar."
Papic thinks Trump's pressure on the Fed must be viewed in an historical context, because "every U.S. president cajoles the Fed into a more dovish setting than the market really requires" but still a weaker dollar makes a big hurdle for international investors to negotiate if they are to keep the U.S. market at a 65% weighting in global indices. If the dollar index drops to 80, as Papic thinks possible in the next few years, then international investors may decide to avoid altogether.
Such a period of underperformance is not unprecedented, Papic points out. Between 2002 and 2007 the dollar suffered a similar drop, but it didn't portend the end of its hegemonic status. Although that may decline naturally over time as the Chinese sphere of economic influence grows, the dollar has a "stickiness" owing to its prevalence in financial transactions.
A reluctance of foreign asset allocators to devote resources on U.S. equities then, no doubt, informs Papic's highest conviction bet: European equities. Papic also expresses a very positive stance towards Chinese assets and the renminbi (USDCNY). BCA anticipates a strong divergence between growth rates in the U.S. and China. BCA's research posits that "the rest of the world must offset the end of the U.S. fiscal gravy train with domestic stimulus of its own."
The Papic playbook for 2026 suggests two theses, one of which has yet to develop much traction among investors yet may well do as the political focus of Americans turns to elections later in 2026.
First is Papic's notion that the White House may declare a housing emergency in 2026. Already, it's moving to block institutional ownership of homes and the government said it'll spend $200 billion on mortgage securities. He thinks Trump may use "macroprudential tools to suppress borrowing rates" and widen the eligibility of mortgages. He thinks Trump will make housing an electoral issue and potential vote winner, and if he can force down the interest rates on say, car loans and credit cards, this may be his way to reflate the economy - via the housing lever.
The upshot of this is that Papic is bullish homebuilders XHB and stocks associated with home appliances and home improvements.
Watch housing starts and homebuilders, Papic says.
The other major theme that Papic recommends investors exploit this year is industrial commodities. "A multipolar geopolitical environment is a boon for capex and investments," he says, as countries try to increase their resilience to the new paradigm of what he calls, "The Age of Empires". Named after a computer game, Papic reckons global powers will begin hoarding physical commodities as they try to build out infrastructure, create new energy sources and new transportation networks.
At this stage, Papic recommends investors increase exposure to industrial metals like copper (HG00), nickel and palladium (PA00) but notes he may add others later.
Industrial metals are the new oil
One final point of departure for Papic: he disagrees vehemently with the notion that the intervention in Venezuela is bearish for oil prices. He doubts Venezuela brings on any new supply in 2026, and he expects the Saudis will, at some point this year, yield to domestic financing pressures and "reverse the max-production OPEC+ policy." Papic's strategy initiates a long position on Brent futures (BRN00) and also oil services and energy equipment companies.
