Gridlock means greater focus on inflation and the Fed
This paper, written by Meera Pandit, Ian Hui and Adrian Tong, discusses the outlook for markets after the mid-term U.S. elections.
Tools and resources necessary to help you make informed investment decisions and build stronger portfolios
This paper, written by Meera Pandit, Ian Hui and Adrian Tong, discusses the outlook for markets after the mid-term U.S. elections.
This paper, written by Tai Hui and David Lebovitz, discusses the outlook for the macroeconomic environment and asset class returns based on the 2023 Long-Term Capital Market Assumptions.
This paper, written by Tai Hui, discusses the outlook for U.S. and China equities after recent economic and policy news. (3-minute read)
This paper, written by Chaoping Zhu, discusses the outlook for China’s policy pivot and the investment implications.
This paper, written by Ian Hui and Adrian Tong, discusses the outlook for fixed income and the investment implications.
Explore how dividend paying stocks can help build portfolio resilience against the prospects of high inflation and recession.
This paper, written by Tai Hui and Meera Pandit, discusses the policy and market outlook with regards to the upcoming U.S. midterm elections. (3-minute read)
The third quarter earnings season is set to kick-off with the large U.S. banks releasing results. Our current estimate for 3Q22 S&P 500 operating earnings per share (EPS) is $53.82, representing year-over-year (y/y) growth of 3.5% and quarter-over-quarter (q/q) growth of 14.8%.
This paper, written by Kerry Craig, Vincent Juvyns, Marcella Chow and Hugh Gimber, discusses the outlook of European equities and fixed income. (3-minute read)
The September Jobs report showed the economy continues to make progress in easing labor market tightness. The recent pace of job growth remains solid but has moderated, and wage growth continues to run at a more modest pace of 0.3% month-over-month.
This paper, written by Clara Cheong, discusses why investors should stay invested through an income approach. (3-minute read)
This paper discusses the current uncertainties surrounding the UK government and economy, as well as market movements and outlook. (3-minute read)
This paper, written by Tai Hui, discusses our outlook for the U.S. dollar and its investment implications on Asian assets and currencies. (3-minute read)
This paper, written by Clara Cheong, discusses the current outlook of growth stocks and its investment implications. (3-minute read)
This paper, written by Tai Hui, discusses the outlook of the U.S. high yield corporate bonds and its investment implications. (3-minute read)
This paper, written by Gabriela Santos and Anjali Balani, discusses the current outlook for EM equities and its investment implications.
This paper, written by Tai Hui, summarizes the key takeaways from the Jackson Hole meeting and its investment implications. (3-minute read)
This week, the Inflation Reduction Act (IRA), a legislative package that includes climate spending, prescription drug pricing reform, and tax reform, was signed into law. The IRA represents a meaningful commitment to climate goals and should reduce the deficit over the next decade but is unlikely to reduce inflation and will weigh on 2023 profits.
This paper, written by David Lebovitz, Ian Hui and Nimish Vyaz, summarizes the 2Q22 U.S. earnings result and its investment implications. (3-minute read)
The broad takeaway is that economic conditions are softening globally, and aggressive central bank tightening is contributing to it. The global economy could avoid a recession if a stronger recovery emanates from China in the second half of 2022, and a soft landing is achieved in regions like the U.S. and Europe, however, that outcome looks increasingly challenging.
This paper, written by Tai Hui, discusses the current situation and development of Asian technology sector with investment implications. (4-minute read)
Governments are aligning behind the goal of achieving net zero emissions by 2050, but dramatic changes to the global economy will be required to get us there. Learn more about the policies and innovations that could pave the way to a carbon-neutral world.
This paper, written by Clara Cheong, discusses the views on enhancing the 60/40 portfolio in today's market environment with investment implications. (4-minute read)
This paper, written by Clara Cheong, discusses the views regarding the earnings recession in the U.S. and path of inflation with investment implications. (4-minute read)
This paper, written by Chaoping Zhu, addresses the prospects and views regarding the gradual recovery of China's economy and its investment implications. (4-minute read)
What has not come into question is whether investors will need alternative sources of income and diversification. As such, it seems increasingly likely that private real estate will be part of the broader investment conversation in the years to come.
This paper, written by Tai Hui, addresses the reason behind and our view regarding the sustainability as a long-term investment theme and its investment implications. (4-minute read)
This paper, written by Tai Hui, addresses the reason behind and our view regarding the fixed income as a portfolio component to prepare for slower growth and its investment implications. (3-minute read)
This paper, written by Kerry Craig, describes the situation of private markets under the prospect of higher rates, higher inflation and a slower growth outlook with investment implications. (4-minute read)
While investors will inevitably be focusing on the Federal Reserve’s policy this week, one question on the back of everyone’s mind would be the risk of a recession in the U.S. (4-minute read)
Even as QT commences, long-term rates are likely to trade range bound between 3.00%-3.5% and be little impacted by balance sheet reduction at first. That said, as bank reserves decline to levels that may restrict bank activity, markets will likely signal the Fed may need to change course.
This paper, written by Tai Hui, discusses inflation and central bank policy in Asia, and its investment implications. (4-minute read)
This paper, written by Chaoping Zhu and Marcella Chow, discusses the current China's COVID situation and future policy with its investment implications. (4-minute read)
Long-term investors are facing a number of challenges today. Multi-decade-high inflation is eroding purchasing power and portfolio values, and recent volatility across capital markets has made the investment landscape look perilous.
The spike in yields through the first five months of this year has led to some very ugly returns in fixed income.
A re-rating of valuations has led to negative equity returns year-to-date, but importantly, earnings estimates have continued to trend higher. In an environment of rising rates, earnings will be the key driver of returns. (4-minute read)
The US economy is showing signs that the post pandemic surge is beginning to moderate, but we do not think a recession is imminent. Nonetheless, stocks are near correction territory, consumer sentiment has soured to levels last seen in 2011, geopolitical tensions are elevated, and prices are higher everywhere; all of which challenge this view.
The war in Ukraine is causing surging commodity prices, COVID lockdowns in China are exacerbating strained supply chains, and 40-year-high inflation has prompted the Fed to aggressively tighten monetary policy. Together these dynamics are also creating uncertainty about future growth.
This paper, written by Marcella Chow and Adrian Tong, addresses the current volatility in global equity markets and its investment implications. (4-minute read)
This paper, written by Kerry Craig and Chaoping Zhu, discusses the current Chinese supply chain under the impact of the COVID-19 wave and Chinese policy, and its investment implications. (4-minute read)
This paper, written by Tai Hui, discusses the driving forces behind recent depreciation pressure in the Japanese yen and Chinese yuan, and what this means for investors. (4-minute read)
This paper, written by Chaoping Zhu, discusses the weakened Chinese economic data in March, and the subsequent policy and investment implications. (4-minute read)
2022 has seen a volatile start, with many of the growth names that performed well in the initial stages of the pandemic—as well as over the prior cycle—under pressure. (4-minute read)
Over the last 15 years, international equities have underperformed U.S. equities by a cumulative 270%. Currency played a role in this underperformance, subtracting 25%, as foreign currencies steadily weakened against the U.S. dollar.
2022 will likely remain volatile for equity markets, as central banks normalize alongside persistently hot-inflation and geopolitical issues result in prolonged uncertainty.
This paper, written by Marcella Chow and Adrian Tong, looks at how food inflation is impacting Asian economies and what it means for investors. (6-minute read)
This paper, written by Kerry Craig, discusses how alternatives and core real assets can help investors increase diversification in their portfolios and generate uncorrelated sources of income. (4-minute read)
This paper, written by Marcella Chow, discusses our long term views on the Chinese Yuan and its investment implications. (4-minute read)
This paper, written by Clara Cheong and Jordan Jackson, discusses our expectations for U.S. interest rates and what it means for investors. (6-minute read)
This paper, written by Tai Hui, discusses the latest development in China's policies, and what investors should look out for going forward. (4-minute read)
This paper, written by Chaoping Zhu and Marcella Chow, discusses the market and economic impact of the latest COVID-19 wave in China. (4-minute read)
This paper, written by Clara Cheong and Adrian Tong, discusses the key drivers within the transitory and sticky components of inflation and presents our thoughts around their paths lower. (6-minute read)
An inverted yield curve driven by short rates rising more than long-term yields has preceded every US recession since 1960 and is therefore a closely watched metric among investors regarding the outlook for the economy and markets.
This paper, written by Kerry Craig, looks at how recent events have impacted stagflation impulses in different regions, and the implications for investors. (6-minute read)
As the events in Ukraine continue to unfold, this note seeks to answer the economic and market questions from investors around the world. (6-minute read)
A forced and rapid energy transition is under way. Discover what impact this will have on commodity markets and clean energy investment opportunities.
This paper, written by Chaoping Zhu, discusses our expectations for the outcome of China's National People's Congress meeting and the investment implications. (4-minute read)
In both a U.S. led boom-bust recession and global synchronous growth, international equities could outperform, suggesting a key role for the asset class in portfolio construction.
Fourth quarter earnings are off to a solid start and the more cyclical sectors are leading the charge. (4-minute read)
Geopolitical tension in Europe, strong demand recovery and weak supply growth are all contributing to higher oil prices. (4-minute read)
Explore how investors can hedge against inflation to protect their capital in the next cycle with the help of alternatives and cyclical sectors.
2021 was a year of steady reform introduction by Chinese authorities, focused on the long-term goals of improving the quality of growth and on addressing non-economic priorities like inequality, leverage, and decarbonization.
This paper, written by Kerry Craig and Jordan Jackson, looks at the outcome of the January FOMC meeting and implications for different asset classes. (8-minute read)
Today, there are more job openings than there are unemployed workers. Explore what impact a tight labour market could have on inflation in 2022.
Inflation is standing at record levels across many markets. Explore our framework for tracking the impact of supply chain disruption on inflation in 2022.
This paper, written by Clara Cheong, discusses the recent turn to hawkishness of developed market central bank policies and the investment implications.
The challenge of low government bond yields means investors must rethink the 60:40 stock:bond allocation. Discover where they can turn for diversification.
This paper, written by Tai Hui, discusses the implications of newly-elected President Biden's policies, such as those regarding COVID-19 and China.
This paper, written by Tai Hui, discusses the implications of rising Treasury yields on inflation, the U.S. dollar and overall economic recovery.
This paper, written by Alex Cheung and Ian Hui, discusses the outlook on the Chinese fixed income market following FTSE Russell’s decision to include China in its World Government Bond Index.
This paper, written by Tai Hui, analyzes the S&P 500 earnings reports and forecasts and their implications on the recovery from the effects of COVID-19.
This paper, written by Tai Hui, examines the recent decline of the U.S. dollar and its implications on global markets.
A number of countries have seen a pick-up in new infections in recent weeks. Instead of derailing the global economy and forcing another dip in economic activities, the latest outbreaks are more likely to dampen and delay the global economy making a full recovery.
China’s stock markets have been experiencing a strong rally since last week, and the upward momentum seems to be building further.
Is it Europe’s time to shine?
June 2, 2020
The balance sheet of the U.S. Federal Reserve (Fed) has increased by 2.9 trillion USD since the start of March, meaning that in just over eleven weeks it has grown more than it did in the five years following the Financial Crisis.
Year-to-date, emerging market (EM) equities are down -17.6%, as a combination of the COVID-19 recession and the oil price shock has led to downward revisions to earnings expectations, as well as weaker currencies relative to the U.S. dollar.
While dividends in some regions are likely to face pressure in the coming months, now is not the time to give up on equities as a key source of income for multi-asset portfolios.
This paper, written by Tai Hui, provides an update on fixed income investment opportunities.
This paper, written by Chaoping Zhu, provides a preview of China’s expected economic policies ahead of the National People’s Congress.
The COVID-19 crisis is causing short-term ESG repercussion and longer-term shifts. Find out why sustainability has never been more important for investors.
Investors are keenly monitoring the number of new infections around the world to gauge whether the COVID-19 outbreak is under control.
Rising production and collapsing demand due to the COVID-19 pandemic is causing an unprecedented glut in the oil market. As a result, we are currently witnessing a pronounced supply and demand shock that has sent oil prices to a multi-year low.
Spreads on emerging market (EM) bond yields have widened to levels not seen since the global financial crisis as concerns grow about the size of the economic downturn.
Oil prices collapsed in early March due to the price war between the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and Russia
As governments around the world step up their fiscal packages to counter the economic fallout from the COVID-19 outbreak, the Chinese government is also following the same path.
Initial claims for unemployment insurance surged to the highest level ever: 3,283,000, spiking from a slightly revised 282,000 last week.
This paper, written by Dr. David Kelly, reviews the U.S> relief bill and its investment implications.
The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity.
In the past two weeks, the traditional negative correlation between equities and government bonds has broken down.
The U.S. Federal Reserve (Fed) opted for another surprise rate cut this morning (March 16, Asia time), instead of waiting for the March 17-18 Federal Open Market Committee meeting.
It is important to avoid trying to predict the future; rather, clients are best served by monitoring the present situation and maintaining composure.
Worries about the spread of the COVID-19 virus continued to grip markets this week.
This paper, written by Tai Hui and Kerry Craig, addresses the latest equity markets’ correction and its investment implications.
The good news is that the number of new confirmed COVID-19 cases in China is coming down and that more people are now recovering than getting infected.
The U.S. Federal Reserve (Fed) has become a dominant player in the bond market through successive rounds of quantitative easing (QE).February 19, 2020
The economic fallout from the Coronavirus outbreak is expected to become more significant for the rest of Asia in the weeks ahead.
China will also need to start addressing the economic fallout soon, as businesses face significant pressure from disruption to consumption.
This paper, written by Chaoping Zhu, discusses the outlook on China following its recent economic data releases and fresh outbreak of COVID-19 infections.
Policymakers on both sides of the Pacific have emphasized that they view their work as incomplete and that several issues remain un-addressed.
The U.S. and Chinese governments gave markets an early Christmas present when they agreed to a partial trade deal. However, much will depend on the details.
Anticipating subtrend growth well into 2023, we remain neutral duration and overweight cash. We underweight equities, expecting meaningful earnings downgrades. We take a neutral stance on credit, with a clear preference for investment grade over high yield.
The factors that we favor held up well in a challenging 3Q 2022 market environment: Equity momentum, merger arbitrage and macro carry were all positive, and losses across other factors were relatively limited. We maintain our positive outlook for equity factors, which appear cheap.
Though global equity markets are already down more than 20% this year, our portfolio managers remain cautious. In a downturn, quality matters, in managements and balance sheets.
Recession is our base case scenario, at 50%. We raised the likelihood of Crisis to 15% while lowering Sub Trend Growth to 30% and Above Trend Growth to 5%. We’re using market rallies to reduce our interest rate exposure and credit risk. Our best idea: high quality, short-dated cash flows.