Asset Allocation Update Treasury yields, inflation compensation & US equities The retreat in US Treasury yields over the past month or so seems at odds with the US economy’s fundamentals, and we doubt that it will be sustained. Our forecast that the 10-year yield will end 2021... 16th June 2021 · 4 mins read
Asset Allocation Update Is US households’ cult of equity a bad omen for stocks? The record allocation of US households (and non-profit organisations) to equites chimes with the broader evidence that the valuation of the US stock market is high by historical standards. With that... 11th June 2021 · 2 mins read
Asset Allocation Update Outlook for Treasuries still a threat to US equities Today’s US Employment Report has failed to awaken the Treasury market from its slumber this quarter. We think, however, that long-dated yields will rise again in due course after their surge earlier... 4th June 2021 · 3 mins read
Asset Allocation Update We expect a brighter future for Japan’s stock market Although Japan’s stock market has substantially underperformed its counterparts in the US, UK and euro-zone during the past few months, we don’t expect it to remain a laggard. 28th May 2021 · 3 mins read
Asset Allocation Update The next phase of the stock market rotation Although we think that the recent outperformance of the energy and materials sectors will soon come to an end, we still expect the financials sector to continue to fare better over the next few years... 24th May 2021 · 5 mins read
Asset Allocation Update We doubt the 10Y UST/Bund spread will keep shrinking Although the spread between 10-year sovereign bond yields in the US and Germany has narrowed so far during the second quarter of this year, we doubt this will continue for much longer. 19th May 2021 · 6 mins read
Asset Allocation Update Just how undervalued is the UK stock market? Although the valuation of the MSCI UK Index has become even more attractive compared to those of the MSCI USA Index and MSCI EMU Index since the outbreak of COVID-19, this is partly due to its sector... 14th May 2021 · 5 mins read
Asset Allocation Update Taking stock of risky asset valuations In this Update, we take a look at the valuations of a broad range of the “risky” assets that we cover on our Asset Allocation service. We think that six key points stand out. 14th May 2021 · 4 mins read
Commodities We think that commodities & US equities will diverge While commodities and US equities often move in the same direction, this is not always the case. We expect poor returns from commodities over the next few years, but reasonable returns from US... 29th April 2021 · 3 mins read
Asset Allocation Update Another look at the valuation of the US stock market Although the valuation of the US stock market is now approaching its peak during the dot com bubble, we doubt that it will reach such giddy heights. This reflects our forecast for a renewed rise in... 28th April 2021 · 6 mins read
Asset Allocation Update EPS, valuations & sector rotation Given the outlook for corporate earnings and Treasuries, we don’t expect the recent partial unwinding of the rotation trade in the US stock market to last. On the contrary, we expect the rotation to... 22nd April 2021 · 3 mins read
Asset Allocation Update Biden’s tax reforms: further fuel for the rotation trade? If enacted, President Joe Biden’s corporate tax reforms could become a significant drag on US equities and hit the earnings of technology, pharmaceuticals and biotech companies particularly hard... 9th April 2021 · 5 mins read
Precious Metals Update Real yields and gold The recent drop in the price of gold below $1,700/oz. has illustrated its greater sensitivity to US long- than short-dated real yields. Although the price has nudged back up above this level at the... 31st March 2021 · 4 mins read
Asset Allocation Update Taking stock of our asset allocation views In light of a raft of recent forecast changes, this Update presents the latest returns projections of our Asset Allocation service for the next couple of years. We think six points are worth... 26th March 2021 · 4 mins read
Asset Allocation Update We doubt higher bond yields will derail DM equities We are sticking to our view that the US stock market will gain a bit more ground this year and next, despite revising up our end-2021 and end-2022 forecasts for the 10-year Treasury yield. We also... 24th March 2021 · 3 mins read
Asset Allocation Update US stock market unlikely to keep beating its economy While the stock market fared much better than the economy in the US overall during the past ten years, we do not expect that to remain the case. 17th March 2021 · 3 mins read
