Bracing for a hard landing

Fidelity
By September 29, 2022 16:13

Bracing for a hard landing

Global Asset Allocation Insights

Inflation is still stubbornly high, meaning the Fed and the ECB are keeping their feet pressed down on the hawkish pedal for now. However, growth data is turning sharply negative in developed markets as the consumer squeeze and tighter financial conditions bite. Europe must also deal with an impending gas crisis that will deal a hefty blow to industry and consumers alike.

Valuations have adjusted down, but, in our view, not enough to fully reflect the grave outlook. Earnings have yet to be meaningfully revised lower, however, implying risk assets could have further to fall if companies start to report weak performance and a worsening outlook. We are positioned underweight equities and credit. 

Fidelity
By September 29, 2022 16:13

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