Asset Allocation S&P 500’s valuation points to mediocre long-term returns US equities have plunged this year, but the S&P 500’s valuation remains a long way from looking low on most measures, including Shiller’s CAPE. This is a key reason why we expect the returns from US... 25th July 2022 · 5 mins read
Commodities Update Energy and materials stocks may continue to underperform Although we doubt that they will fare quite as badly as they have in recent weeks, we still expect the energy and materials sectors of global stock markets to underperform over the next couple of... 19th July 2022 · 3 mins read
Bonds & Equities The threat to global markets from tweaking YCC again While a lot of attention has focussed naturally on the potential implications for the JGB market of a further tweaking of the Bank of Japan’s Yield Curve Control , the country’s huge investment in... 15th July 2022 · 5 mins read
Asset Allocation Update China’s equity outperformance may prove short-lived The resurgence in China’s stock market may already be over. We forecast that the MSCI China Index will struggle alongside major equity indices elsewhere over the next year or two, as China’s economic... 12th July 2022 · 5 mins read
Asset Allocation Update Equities may underperform bonds if earnings falter As forecasts for corporate earnings in the US finally start to come down amid worries about the outlook for the economy there, this Update considers the implications for equities and bonds. 8th July 2022 · 3 mins read
Emerging Markets Economics Update EM assets & the risks from tighter DM monetary policy We doubt that aggressive policy tightening by developed market (DM) central banks will be followed by a series of financial crises in major emerging market (EM) economies in the way that it has at... 27th June 2022 · 6 mins read
Global Markets Update Answering your questions on our market forecasts We held a Drop-In on Wednesday to discuss what the evolving outlook for monetary policy and global growth means for our markets forecasts. This Update recaps the key questions we addressed in the Drop... 24th June 2022 · 8 mins read
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
