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Buy the dip or sell the rally in 2H 2026?
Economy
On July 13, 2026, BCA Research hosted a debate between bulls and bears, moderated by Chief Investment Strategist Marko Papic.
Peter Berezina and Artur Budagyan defended the bearish position, while Juan Correa and Noah Weisberger defended the bullish position. Ultimately, the bulls emerged victorious, but BCA Research warned that "this victory may be short-lived."
According to BCA Research's bearish position, the US equity market is "in the midst of an earnings bubble": margins are less sustainable than they appear, valuations are above historical levels, and free cash flow at major tech companies is already beginning to decline.
Bulls counter that computing power remains in short supply, order books are growing, and major tech companies are trading at their lowest valuations in a decade. BCA Research noted that history favors the bulls: when earnings growth remains positive, the S&P 500 rarely declines. While a decline in earnings per share (EPS) would be a warning sign, the company noted that "there is very little evidence that such a scenario is imminent."
Nevertheless, BCA Research identified a key risk: in the long term, great new technologies "do not necessarily translate into highly profitable companies."
The company also warned that a correction is inevitable, but timing the market exit is extremely difficult.
Ultimately, BCA Research concluded that the capital spending trade "will ultimately end, likely in a destructive manner," but for now, economic and fundamental tailwinds will prevail. The company added that the bulls' main concern remains multiple compression, not a recession or earnings collapse.