Timely commentary, strategic perspectives and in-depth analysis from our investment teams to help guide your portfolio decisions.
As U.S. growth is cooling, but not collapsing, we have trimmed overall risk in our portfolios. We are broadly neutral to modestly overweight equity; we overweight credit with reasonable conviction and mildly overweight duration.
We see Sub-Trend Growth as becoming more likely at 60%, and have lowered the probability of Above-Trend Growth to 10%. We raised the probability of a Recession to 20% while Crisis remains at 10%.
The outlook for profits is cloudier, but we still expect modest growth this year. Many of our investors favor quality stocks in the financial and industrial sectors while avoiding high priced defensives.
U.S. equity factors led the market lower in the fourth quarter of 2024, the first decline, in aggregate, since early 2023 as the market was challenged by stock investors’ preference for expensive, low quality stocks. Macro factors performed well.
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