Timely commentary, strategic perspectives and in-depth analysis from our investment teams to help guide your portfolio decisions.
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Expecting subtrend global growth and cooling inflation, we remain underweight equities and lean away from U.S. stocks In duration, we are neutral, with a preference for U.S. Treasuries. We upgrade credit to overweight, but specifically for investment grade.
Recession is our base case scenario, at 60%. We’re keeping Sub Trend Growth at 30% while reducing Above Trend Growth to 0% and Crisis to 10%. Our best idea: Use every backup in yields to add high quality duration, such as investment grade corporate bonds.
Our portfolio managers are becoming more optimistic. Profit forecasts are getting more realistic, so far earnings have held up well, and valuations look much more attractive than they did a year ago.
During one of the most challenging years for investors, equity factors, led by value and quality, continued to climb. A blend of factors hit a record high to close out the year.