Timely commentary, strategic perspectives and in-depth analysis from our investment teams to help guide your portfolio decisions.
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We have growing conviction in a return to trend-like growth and an extension of the cycle. We overweight credit, which should offer equity-like returns over the next two to three quarters. In our equity overweight we favor the U.S., Japan and emerging market ex-China equity. We are neutral overall on duration.
Despite mixed data and the rarity of soft landings, the Fed may have engineered one. Our base case: 70% probability of Sub Trend Growth. An economy gliding to trend growth, and 2% inflation, have always been good for credit risk. This time should be no exception.
Our portfolio managers are a little more cautious on the outlook. Many prefer quality stocks and find less expensive names in the more cyclical, industrial areas of the market. Fundamentals of corporate profits still look good.
Factors had a strong first quarter, particularly equity factors. Equity value rose in nearly every region and remains inexpensive. Prospects remain attractive for a range of factors, including equity value and quality in the U.S., and macro carry