Yes. Aggressive central bank tightening has caused economic growth to slow in Europe and the United States, and we expect that the recent banking sector stress will further weaken economic growth. Now is the time for investors to tactically overweight quality equities, given this style has tended to outperform broad equities during periods of economic […]
April 2023
No, while the recent outperformance and positivity surrounding Eurozone equities was justified by shifts in the macroeconomic landscape, we do not have confidence that outperformance will continue, given the challenges still facing the region. Therefore, we suggest investors keep Eurozone equity allocations in line with policy weights. Since their recent relative low point at the […]
March 2023
What a difference a couple of months makes. Economic conditions have improved since year-end 2022 due to the heady brew of China lifting its zero-COVID policy, Europe navigating its energy crisis better than anticipated, and cooling inflation in the United States. In early February, an exceptionally strong US labor report and a sharp rebound in […]
February 2023
Southeast Asia, also known as ASEAN (The Association of Southeast Asian Nations), was a relative safe haven for investors in 2022. In local currency terms, ASEAN equities returned -0.1% in 2022, outperforming Asia ex Japan (AxJ) and developed markets (DM) equities, which were down more than 15%. While ASEAN currencies have been under pressure, the […]
February 2023
Yes, we expect US small-cap equities will outperform US large-cap equities this year. Our view is based on the belief that the large valuation spread that exists will likely narrow and that large company earnings are likely more at risk of missing expectations than small company earnings. To overweight small-cap equities, we recommend funding it from […]
February 2023
Yes, it is likely that the “softish landing” implied by forward consensus earnings expectations will fail to transpire. In contrast, we anticipate a recession, given the decline in leading economic indicators and our view that the Federal Reserve will not be quick to cut rates to support activity. After adjusting downward in recent weeks, consensus […]
January 2023
We expect global earnings growth will be below average next year, as prior interest rate hikes increasingly bite. With this backdrop, we expect value equities will outperform, Chinese equity underperformance will correct, and Healthcare may present an overweight opportunity. Global Earnings Growth Will Be Below Average in 2023 Kevin Rosenbaum, Global Head of Capital Markets […]
December 2022
No. Despite the recent spate of lockdowns in China, we still anticipate some form of easing of the current zero-COVID policy and increased support for the economy following the Party Congress in October. This will ultimately drive a rebound in the Chinese economy and allow Chinese equities to outperform global equities. While the timing and […]
September 2022