Insights

92 news articles are available

12/05/2024 Global Investment Views, Equity, Fixed income

After Trump victory, all eyes on inflation

A resilient US economy, the anticipation and eventual victory of Donald Trump and his recent appointments, along with risks around inflation have been driving nominal and real yields over the past months. But US equities and the dollar rose amid a belief that the US economy would benefit from Trump's policies at the expense of the rest of the world. While we agree US policies would reverberate across European assets and emerging markets, the actual impact depends on specific measures and countermeasures.

12/04/2024 Investment Talks

Looking Beyond a Top-Heavy Market: Four Areas for the Future

Underneath the surface of today’s concentrated US equities market, sharp earnings recoveries may soon play out and structural and cyclical changes may create new winning and losing stocks. Although the market is mostly ignoring the valuation risks, we have seen signs that this market imbalance may be ready to unwind. Notably, a higher-than-average amount of S&P 500 returns is explained by company-specific factors rather than macro factors, and valuation dispersion is also high. For active managers, the key is not just to identify pockets of value, but paths to future value through revenue and earnings growth.

11/15/2024 Investment Talks

2025 Investment Outlook: Bright spots in a world of anomalies

We are in an unconventional economic cycle phase characterized by a positive outlook alongside anomalies like market concentration and excessive debt levels. While global macro liquidity supports riskier assets, growing policy uncertainty and geopolitical tensions highlight the need for greater diversification. Escalating geopolitical tensions, increased economic frictions, and ongoing conflicts will require companies to form new partnerships and relocate their operations to mitigate risks. From a fixed income perspective, the gradual return to neutral monetary policies may emphasize bonds' income-generating function, with relatively higher yields compared to the past. We see appealing opportunities in investment grade and short maturity high-yield credit.

11/07/2024 Investment Talks

Trump victory: Key implications for investors

Former President Donald Trump will return to the US White House for the next four years and, with the Republican party also taking the Senate and possibly the House, a “red sweep” is the most likely outcome. Financial markets reacted by extending popular “Trump trades” – pushing up bond yields, the US dollar and equity futures – as investors assign higher odds of Trump turning policy proposals into reality. The inflation impact of Trump’s policies will pose risks to fixed income investments, and these could be amplified by concerns about US fiscal sustainability.

11/01/2024 Global Investment Views, Equity, Fixed income

Mixed economic signals open up opportunities

The move up in bond yields, US stocks (record highs in October), and Europe indicate markets' perception of a perfect scenario centered around strong US growth and falling inflation and a positive impetus from monetary easing in Europe. Although we acknowledge the resilience of the US, not all data in the US and Europe has been straightforward.

10/25/2024 Investment Talks

2024 US elections: macro, geopolitical, and investment perspectives

The broad outlines of the candidates' respective platforms are coming into focus, though they still lack clarity on costs related to specific proposals. Most importantly, it will not be clear until after the elections which policies will be implemented - beyond the election rhetoric - or whether Congress will agree to enact them. Here, we evaluate the candidates' platforms and their potential effects on the US economy.

10/10/2024 Cross Asset

A call to action for Europe's competitiveness

A recent report in Europe shows the region's productivity and investment gap with the United States is widening, and a similar trend is emerging in connection to China. The risk of Europe becoming irrelevant is escalating, particularly in light of advancements in the digital economy and artificial intelligence (AI). In the US, the Fed gave strong forward guidance on rates, which is in contrast to its recent approach of staying data dependent on inflation. This, coupled with some concerns on growth, led us to lower our terminal rate expectations. Its 50bp cut underscores the Fed's willingness to pivot after the recent labor market softening and diminishing upside risks to inflation. We expect further 50bp cuts by year-end.

10/08/2024 Investment Talks

October 2024 | US High Yield Market Outlook and Positioning

Third-quarter returns were strong. Performance of BBs and Bs was fueled by falling government bond yields as the major central banks’ swings to more accommodative policies were offset by mildly widening spreads. The big performance surprise was the extremely strong performance of CCCs and the Distressed index.

10/07/2024 Global Investment Views, Equity, Fixed income

Fed rate cut boosts the markets – but for how long?

Capital markets whipsawed between a weakening US labor market and hopes that the Fed would successfully steer the economy towards a soft landing. Markets are optimistically interpreting the latest policy action, which could potentially boost consumption and investment. We now believe the Fed will ease policy by another 50 bps this year (75 bps previously expected), split equally between its two remaining meetings.

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