Another good year for investment returns ahead, if inflation trends downward Enormous fiscal stimulus, funded by monetary policy, and pandemic induced supply-side challenges pushed inflation to its highest level in nearly 40 years. This poses risk to cycle longevity and
A little bit over a year ago, President Biden was elected, and the cyclical recovery rally kicked into gear. Low-quality stocks (lower profitability, higher debt) that had particularly suffered earlier in 2020, benefitted the most and outperformed all other parts
Global Rates: Yields edge higher driven by ongoing inflation worries and 2022 rate-hike expectations Global Currencies: U.S. dollar remains resilient versus DM, EM currencies, acting as a market barometer of COVID concerns Investment Grade: Despite Fed and virus uncertainty, we see spreads
Amid persistent uncertainty, investors could stand to benefit from diversifying their portfolios. In this paper, we outline how the energy and health care sectors might help investors to grapple with inflation and further COVID challenges.
Omicron uncertainty; inflation certainty The resurgence of the virus cycle, central banks’ reactions to high inflation figures, and Evergrande’s unavoidable default have led to some volatility in the market, but these issues have not caused any major disruption. In the
Inflation and supply chain headwinds are expected to ease as the year progresses. And reopening trade will present select opportunities. As economies transition to recovery from the onset of the pandemic, there will be changes and challenges. Without accommodative monetary
Although its decarbonisation has been under way for several years now, as highlighted by the strong growth in renewable power capacities, the power sector still accounts for 38% of global energy- and industryrelated CO2 emissions. – The decarbonisation pace of
The “new issue premium” is a proven phenomenon in credit markets. Corporate bonds are often underpriced at issuance, and then post strong price gains. Using documented evidence of this recurring pattern, we researched a set of bondissue features that contribute
Chi Time China’s exchange rate policy favours a stable renminbi. However, the positive factors that have boosted the Chinese currency are turning negative, leading to some views that the renminbi should weaken in 2022. They include an expected decline in
Investment Outlook 2022 After the re-opening surge in 2021, growth in 2022 will moderate and central banks and governments will begin to remove stimulus. But we are far from worried about an abrupt stop in either economic activity or policymaker
The Infrastructure Investment and Jobs Act is one of several positive drivers for municipal bonds in the new year. After months of debate, Congress passed the $1.2 trillion Infrastructure Investment and Jobs Act (“IIJA”), which was signed by President Biden
Als er één economisch onderwerp de krantenkoppen beheerst, dan is het wel inflatie. De media staan er vol van. En terecht. We moeten terug naar begin jaren tachtig om soortgelijke hoge percentages te zien. In dit artikel zullen we ingaan
Are asset managers using their proxy votes for action on environmental and social issues? Introduction and summary The Covid-19 pandemic has deepened the already growing social inequality crisis1 and, despite a temporary reduction in emissions caused by lockdowns, greenhouse gas
In our latest Money Monitor report, we share a comprehensive analysis of flows in European openended funds and ETFs. We also look at the main investment trends observed over the past month. Key takeaways: The increased anxiety brought by the
The U.S. Treasury yield curve steepened and spread sectors rallied strongly last week, as fears over the COVID-19 Omicron variant eased and inflation data came in-line with expectations. The Federal Reserve holds its last meeting of 2021 on Wednesday, where
Natural gas prices have declined sharply by 32.8%1 over the prior month. As we discussed here, market price action had run ahead of its underlying fundamentals. A combination of expectations of a warmer than usual winter period in North America
Beleggingsvooruitzichten 2022 Na de heropeningsgolf in 2021 zal de groei in 2022 vertragen en zullen centrale banken en regeringen een begin maken met het afbouwen van hun stimuleringsmaatregelen. Wij maken ons echter allerminst zorgen over een abrupte stopzetting van de
It’s a bit early to say how next year’s mid-term elections will go. That’s doubly true in terms of potential market implications. U.S. electoral history and some early signs in the data suggest that Republicans should do reasonably well in
Macro outlook: Compression, decompression, absorption Key points We expect pressure on global supply to gradually decline, contributing to a slowdown in inflation This would allow central banks to maintain a prudent approach to the pace of policy normalization It has
Commercial real estate (CRE) investment performance for US properties soared in the third quarter as unlevered total return reported by the National Council of Real Estate Investment Fiduciaries (NCREIF) registered 12.1% for the four quarters ending September 30, 2021. This
Several colleagues and I made our first journey back to China in more than 15 months as we start to get back to on-the-ground research. Our trip in May took us to 16 cities and included close to 90 meetings
Hydrogen is the most abundant molecule in the universe, found primarily locked in water and hydrocarbons. Its qualities have been known for a long time, and it has been used for more than 100 years as an industrial chemical. While
Understanding why we must shift from a linear to a circular model is key for our future. Hard law is being introduced in many countries, especially in the EU and is going to change the way companies can produce and
After another extraordinary year for investors, expectations are mounting that 2022 will form a turning point for the global economy and markets: in the face of rising inflation, central bankers aim to withdraw the stimulus that has provided an extremely
Shifting sustainable gears… The turn of the year is always a good time to look forward and consider what the enduring trends are –and what tail events might derail our baseline thinking. 2021 serves as an important reminder that sticking
Multi-asset market outlook While inflation in the US hit a new high in November, stagflationary fears have substantially eased. The pick-up in economic momentum visible in the employment numbers and the purchasing manager’s survey have both eased growth concerns. Of
I wonder if anyone at the start of the year would have predicted that US inflation would have risen to 6.8% y/y in November? If we had expected this, you would have thought that bond yields would have traded at
New Omicron virus mutation and a hawkish Jerome Powell turned November into a rather negative month for most asset classes. Whether this is considered a good entry point largely depends on one’s assessment of Omicron and inflation. At this point
10 KEY MESSAGES FROM THE 2022 INVESTMENT OUTLOOK The road back to 70s narrative gains traction. Secular stagnation is a thing of the past, the “roaring 20s” – a new economic miracle – a dream. Global growth will return to
Recovery, risks and relationships Looking back over the last couple of years, it seems that while so much in our world has changed, much has remained the same. Yet we’ve learned a few lessons along the way. We seem to
Our macroeconomics and markets sections highlight that: While some production constraints will remain well into 2022, they will be resolved eventually, enabling economies to revert to trend growth rates without generating higher inflation. Substantial accumulated household savings mean consumers have
CROSS ASSET Investment Strategy The “real” puzzle Central banks are sticking to their temporary inflation narrative, even though the latest CPI readings support the “sticky” narrative. We think, investors should look for ‘real’ returns in credit offering higher yields, together
We entered 2021 with the prospect of new vaccines taming Covid-19 and that effort proved transformative in developed markets. The coronavirus persists, however, and its impact will continue to be felt in 2022 as the pandemic plays out. New therapies
Global Asset Allocation Views – 1Q 2022: It is too early to say with certainty how and when the pandemic will finally retreat. Rapid deployment of restrictions in Europe suggests we are not there yet. But at the same time,
2021 was a standout year for UK real estate, which delivered annualised total returns of 14.7% to the end of October, as robust income returns were complemented by the return of capital growth. This represents the highest level of annualised
Global Asset Allocation: The View From Europe: While stocks have broadly rallied nearly 80% off the lows of March 2020, leadership within has flip‑flopped between expensive, defensive growth …
Based on our view that the global economy is mid-cycle, we remain overweight overall risk. However, we believe with risk assets seemingly priced for compelling opportunities, they are also more vulnerable to exogenous …
2021 was a year of booming markets which were in danger of overheating before the Omicron Covid-19 variant came along. A profit boom on both sides of the Atlantic has supported equity markets, with the US looking exceptionally strong in
The third quarter is normally a quieter period following the main corporate Annual General Meeting season and, this year, being the final run-up to the COP26 conference in Glasgow. With COP26 a key milestone for the global climate response, climate
From pandemic to endemic IN SHORT Although lower than in 2021, we expect growth to remain above its long-term target Inflation should broadly subside over the course of next year as supply-demand mismatches get resolved and labour market tightness eases
Just one year ago, COVID-19 vaccines were not yet approved, gatherings were restricted amid surging cases, many schools and offices remained closed, and thoughts of moving past the pandemic seemed as realistic as visions of sugar plums. The transformation seen
We’re now seeing the economic consequences of shutting down the world and then hitting the restart button. As most economies re-open, demand for goods and services has largely recovered to pre-Covid levels, however supply chains have remained under stress. What
Hoewel de financiële markten zich zorgen maken over de opkomst van de Omicron-variant van het coronavirus, moeten beleggers niet panikeren. De economieën zijn beter uitgerust om een nieuwe golf van besmettingen aan te kunnen. Risicovollere activaklassen noteren tegen of dicht
Economic and Strategy Viewpoint December 2021 After a surge in activity in the first half of the year the world economy hit an air pocket in the third quarter. Bottlenecks in supply chains meant that delivery times soared and firms
Interest rates have been historically low for more than a decade, dampened by the flood of monetary stimulus introduced in the wake of the global financial crisis. In 2022 we expect this to change. As we move towards economic recovery
The European Union experienced a deep recession during the pandemic but also used it as an opportunity to demonstrate its ability to take strong, concerted action and to bounce back, all amidst the redrawing of Europe’s economic and political …
US CRE Market Insights: Commercial real estate (CRE) investment performance for US properties soared in the third quarter as unlevered total return reported by the National Council of Real Estate Investment Fiduciaries (NCREIF) registered 12.1% for the four quarters ending
Volatility returned to markets as Omicron, a new Covid-19 variant, spooked investors. With 50 alterations, including 33 on the spike protein, markets were left scrambling for clues regarding its contagiousness, its lethality and the efficacy of vaccines and treatments. Several
Market recap: Global equities initially rallied, but later dropped towards the month-end on fears of the COVID-19 variant, Omicron. Global bonds rallied over …
The economic recovery has been thrown into jeopardy by the emergence of the new Omicron variant of Covid-19. However, we think that it is unlikely to completely derail the cycle and should allow central banks to tighten monetary policy in
