Asset Allocation Update Is China’s stock market still relatively appealing? The powerful re-opening rally in China’s stock market has eroded a large part of the valuation gap that led us to judge that equities there were relatively appealing a couple of months ago. That said... 18th January 2023 · 5 mins read
Asset Allocation Update Yields elsewhere point to a bit more pressure on JGBs We think that the prevailing yields of high-grade 10-year government bonds in other major developed markets support the idea that the 10-year Japanese government bond yield would rise a bit further... 17th January 2023 · 4 mins read
Asset Allocation Update Four key points to consider this US earnings season This Update makes four key points about corporate earnings in the US as the Q4 results season gets into swing. They all feed into our view that the S&P 500 will remain under pressure until the spring... 13th January 2023 · 5 mins read
Asset Allocation Update Making the case for euro-zone equities While euro-zone equities face some meaningful short-term headwinds which threaten their recent run of outperformance, we still expect them to fare better than US equities over the next couple of years... 13th January 2023 · 5 mins read
Asset Allocation Update How 2022 altered the long-run outlook for US equities Although valuation premia in certain parts of the US stock market shrank significantly last year, we think there is still some room for this to continue in the coming decade and weigh on their... 6th January 2023 · 5 mins read
Asset Allocation Update Assessing the fall-out from the change to the BoJ’s YCC The surge in government bond yields around the world in response to today’s decision by the Bank of Japan to tweak its policy of Yield Curve Control highlights the risks to international markets posed... 20th December 2022 · 4 mins read
Asset Allocation Update The World in 2023: What to look for in financial markets Two of the three topics we expect to dominate the global macroeconomic debate in 2023 – falling inflation and future monetary policy loosening – are now largely priced into markets in the US. The... 15th December 2022 · 9 mins read
Asset Allocation Update What to expect if US inflation really has peaked? The real returns from both US equities and 10-year Treasuries have often been quite good in the couple of years after past peaks in core inflation in the US, but the period following peak inflation in... 12th December 2022 · 6 mins read
Asset Allocation Update Energy stocks may hold up better than oil prices suggest Even if oil prices don’t rebound substantially in the near term, we doubt developed market equities in the energy sector will reverse course and underperform the rest of the stock market next year. In... 9th December 2022 · 4 mins read
Asset Allocation Update On the timing and scale of a sustained rebound in the S&P 500 We suspect that the S&P 500 will make a new cyclical low by the spring of 2023 as a shallow recession gets underway in the US, before rebounding to end next year higher than it is now. In view of the... 8th December 2022 · 4 mins read
Asset Allocation Update Squaring yield curve inversion with the rally in risky assets While the progressive inversion of the Treasury yield curve may seem inconsistent with the recent rebound in risky assets in the US, they had already discounted some bad news about the economy... 30th November 2022 · 5 mins read
Asset Allocation Update Valuations may limit the outperformance of Indian equities We think the stretched valuations of Indian equities compared to those elsewhere will prevent the standout performance of Indian equities seen so far in 2022 being sustained over the longer run. China... 28th November 2022 · 4 mins read
Asset Allocation Update US equities, bonds and earnings recessions We doubt the recent outperformance of equities vis-à-vis government bonds in the US will persist over the next three to six months, given our view that the economy there is heading for a mild... 25th November 2022 · 5 mins read
Asset Allocation Update We think euro-zone equities have further to fall Our downbeat economic forecasts for the euro-zone underpin our view that equity markets there will fall further in the coming months. Within the region, we think the downside risks for equity prices... 18th November 2022 · 4 mins read
Asset Allocation Update Long-run US equity relative performance and the US dollar We suspect the underperformance of US equities that has accompanied the US dollar’s slump so far this month will become a feature from mid-2023, as the currency eventually comes under sustained... 16th November 2022 · 3 mins read
Asset Allocation Update Is China’s stock market relatively appealing? The news that the authorities in China plan to “optimise” their response to the pandemic while not abandoning their zero-COVID policy has coincided with a surge in its stock market. There is still a... 11th November 2022 · 6 mins read