Asset Allocation Update Revisiting the case for US bank equity outperformance The prospect of weaker economic growth has reduced the appeal of US banks’ equities, even though they may yet benefit from a renewed rise in long-dated Treasury yields and still appear relatively... 23rd June 2022 · 4 mins read
Asset Allocation Update Treasuries and US equities less likely to bottom out together The prospect of even tighter Fed policy than we had previously envisaged raises the risk of a worse outcome for the US economy and corporate earnings further down the line than we had assumed. So, we... 15th June 2022 · 5 mins read
Global Markets Update Turning more downbeat on both Treasuries & US equities The prospect of tighter Fed policy than we had previously envisaged presents upside risks to our forecasts for the 10-year Treasury yield as well as downside risks to our forecasts for the S&P 500. In... 14th June 2022 · 4 mins read
Asset Allocation Update US equity valuations still much higher than elsewhere Despite the sharp fall in the US stock market this year so far, US equities still appear much more highly valued than their peers in the rest of the world. While that might not tell us much about the... 10th June 2022 · 5 mins read
Asset Allocation Update Soft landing for the economy but perhaps not for markets? While we forecast that the US economy will merely slow rather than enter a recession, we still expect twin sell-offs in stock and bond markets to resume, with value stocks and defensive sectors... 8th June 2022 · 4 mins read
Asset Allocation Update Consumer staples stocks may outperform again Even if high inflation continues to put downward pressure on profit margins, we still suspect that the consumer staples sector in the US will be a relative bright spot against a backdrop of... 27th May 2022 · 5 mins read
Asset Allocation Update Yield curve positioning after peak inflation Although Treasury yields have dropped back in recent weeks amid signs that inflation has peaked, we don’t think it makes sense to extend duration. Of course, the longer a bond’s remaining life, the... 24th May 2022 · 2 mins read
Asset Allocation Update On the relative prospects for US equity REITs We expect US equity REITs to remain under pressure between now and the middle of next year, given our view of the US stock and bond markets. Nonetheless, we doubt they will underperform US equities... 17th May 2022 · 5 mins read
Asset Allocation Update Lessons for markets from the rapid 1994/95 rate hikes The struggles of both bonds and equities during the Fed’s rapid hiking cycle of 1994/95 may provide a warning to investors today. Markets Drop-In (11 th May, 10:00 EDT/15:00 BST): We’re discussing our... 6th May 2022 · 4 mins read
Asset Allocation Update S&P 500’s valuation suggests downside but not disaster While the valuation of the S&P 500 appears high in absolute terms – even after the falls in the index in 2022 so far – it seems far less stretched once the still historically low real yields of US... 28th April 2022 · 5 mins read
Asset Allocation Update Relative asset performance after inflation has peaked Although the fortunes of major assets have varied after high inflation in the US has peaked, we still think the historical evidence may offer clues to their relative performance in the coming years. 27th April 2022 · 5 mins read
Asset Allocation Update Slim chance of another 2000s-style boom in EM equities We think that a period of sustained outperformance from emerging market equities relative to those in developed markets – like that which accompanied the last big bull run in commodities in the 2000s... 22nd April 2022 · 6 mins read
Asset Allocation Update US value stocks may continue to outperform While the long-running underperformance of US value stocks relative to growth stocks seems linked in part to lower interest rates and structural weakness in the economy, much of it is hard to... 14th April 2022 · 5 mins read
Asset Allocation Update Revisiting the case for Japanese equities The valuations of mid- and large-cap equities in Japan have become even more attractive compared to those of their US counterparts following a further period of substantial underperformance in common... 12th April 2022 · 5 mins read
Asset Allocation Update US yield curve and equities dancing to different tunes The resilience of the US stock market over the past month or so is hard to square with recent inversions in parts of the US Treasury yield curve. While we do not think that these inversions... 6th April 2022 · 4 mins read
Asset Allocation Update What Russia’s exclusion means for MSCI’s EM EMEA Index Even though the ejection of Russia from the MSCI EM EMEA Index has changed its country and sector composition, we doubt that this will meaningfully change how it tends to behave. Our forecasts for... 1st April 2022 · 3 mins read