Monthly View

In August both equity and bond markets took a step back because of better-than-expected economic data in the U.S. Why? Because the market is now more concerned about the economy running hot rather than a recession. If there is a rebound in inflation, will the Fed keep raising rates?

In July global financial markets continued to move higher, with most major markets generating positive returns for the second consecutive month. Asian markets led this dynamic with Chinese stocks posting the largest returns.

The sun started shining on equity markets as it became clear that the global economy is not on the brink of a recession, while at the same time inflation is moderating.

With the debt ceiling out of the way, investors can refocus on factors driving stocks: stronger earnings, easing banking stress, improved housing data, growing manufacturing activity, AI-driven productivity gains, and a stable labor market.

So far this year, economic growth has been positive, but we are starting to see a slowdown in economic activity. Whether this means that a recession is around the corner is the big question.

The collapse of Silicon Valley Bank and Signature Bank, followed by the forced merger of UBS and Credit Suisse, brought back memories of 2008. However, we don’t believe that the global economy is on the verge of another financial crisis.

Instead of falling into recession, the global economy has strengthened since the start of the year. This, in turn, has led to fears that, instead the global economy might be running a little hot.

There is an old Wall Street saying: ‘As January goes, so goes the year’. If that holds true, we are off to a good start. 

With 2022 behind us, our expectation is that global growth will surprise to the upside in 2023. 

Nearly all financial assets generated strong returns in November. Two developments explain the improvement in investor sentiment: signs that inflation is peaking and optimism Beijing will relax Covid restrictions.

This year has been a wild ride for global markets, but it’s not 1982. Our investment team gives insight into equity markets, if the U.S. dollar has peaked, and updates the risk of recession.

September ended much the way it began – a complete reversal of the summer’s rally. All major financial assets – except the US dollar – generated negative returns last month.

Global equity and bond markets started August on a positive note, but sentiment turned as investors’ attention shifted from recession fears to Fed hawkishness.

We expect stock prices to rise further during the remainder of the year as U.S. recession risks and inflationary pressures recede.

The moment everyone becomes very negative about the economy, the risk is that it becomes a self-fulling prophecy.

We still think that the global economic cycle is strong enough to avoid a recession in the short term, especially in the U.S.

Fewer pandemic-related disruptions, and a stabilization in Ukraine, could set the stage for sharply lower inflation and a revival in global growth in the second half of this year.

For the third consecutive month, most financial assets posted negative returns in March. The global equity market has been down about 6% since the start of the year.

Global equities faced extreme challenges in February 2022 as the invasion of Ukraine by Russia shocked the world.

markets change but at the same time they don’t really.

It’s 2022 and right on time we’ve entered a new phase of the cycle, with central banks in most developed markets turning more hawkish in the past month.

We remain positive on global equities, although we could see sector rotation from mega cap growth stocks to more cyclical stocks.

Most of the concerns that gripped the market in September disappeared again in October as several of the risks turned into positive surprises

The S&P 500 has more than doubled in 18 months without any significant corrections until September, when market sentiment turned negative.

A “golden rule” for asset allocation is to remain bullish on equities unless there is a good reason to think that a recession is around the corner.

The unprecedented nature of the pandemic, as well as the unclear impact the delta variant will have given prevailing rates of vaccination in advanced economies, has clouded the near-term economic outlook. In…