This weekly update provides a snapshot of changes in the economy and markets and their implications for investors.
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The COVID-19 outbreak has pushed the global economy into recession and equities likely have further to fall. We are overweight cash and duration and modestly underweight equity and credit. We expect to stay nimble in our relative value positions.
Discover how growth stocks have surpassed value stocks since 2007, and the economic scenarios in which value could once again outperform growth stocks.
We emerged with a cautious near-term view from our latest quarterly strategy meeting in early September. In our base case scenario, the global economy is expected to narrowly avoid recession and continue to grow, albeit much more slowly.
We raised the probability of Recession to 55% after virus-induced shocks, oil prices’ collapse and violent market volatility. We are de-risking, adding very high quality duration, while expecting credit markets to cheapen and reserve currencies to do well
In our first post of the “Insurers and COVID-19” series, we analyzes the public equity portfolios of P&C insurers during this turbulent time.
We expect another positive year for emerging market debt in 2020, with base case expectations of about 8% returns for emerging market hard currency, and 11% for emerging market local currency.
As the value factor is mired in one of its worst drawdowns in history, we analyze its underperformance and explain why we think it is cyclical, not structural.