We expect the second half of 2022 to present the same macro headwinds that posed a challenge in the first half: inflation, aggressive central bank action, growth concerns and wavering sentiment. Broadly, the pace and aggressiveness at which central …
The fragility of global supply chains exposed during the COVID-19 pandemic remains one of the top economic challenges facing the world. In one respect, globalisation has long been characterised by developed market countries offshoring production to lower cost locations. But
China has once again captured the attention of investors seeking shelter from unprecedented global policy tightening. This is understandable, as the country was first in, first out of the Covid pandemic and remains ahead of the curve in terms of
How to Prep Your Portfolio for a Different Kind of Recession Risk: During the first half of 2022, global equity markets tumbled around 20% from their January peak, with losses on typical stock/ bond portfolios almost as large, as bonds
Monthly Investment Outlook: Global activity slowed down in late December and should remain moderate in Q1-22. The Omicron impact was limited to a few services, but disruption remained in place in …
It was a bruising first half of the year for financial market participants, with U.S. and global stocks entering bear market territory while core bonds, generally considered “safe-haven” assets, declined by double digits. Russia’s war on Ukraine continues to warp
The Federal Reserve did not surprise and raised its target range for the federal funds rate by 75 basis points to 2.25%-2.5%, referring to high inflation as its primary concern1 . A strong labour market supported a hawkish tone overall
As we have highlighted for some time, our macro viewpoint remains that this cycle is different. Specifically, we see uneven supply constraints, higher levels of interest rates, and heightened geopolitical risks against a backdrop of slower real economic growth and
Headline inflation will likely peak this quarter, but domestic service inflation should continue to rise. Growth is set to slow as consumers feel the squeeze in real …
Global equities fell in Q2, extending year-to-date declines. The MSCI World Index returned -16.2% in Q2, taking the YTD fall to -20.5%. The market backdrop remained dominated by concerns over higher inflation, rising …
The slump in global equities deepened in the second quarter of 2022 as concerns about a recession replaced fears of high inflation and an escalation of the war in Ukraine seemed less likely. The US Federal Reserve has maintained its
Negative supply shocks and the hangover from large demand-side stimulus are keeping global inflation stubbornly high. Central banks, most notably the US Federal Reserve, are committed to reducing inflation by significantly tightening financial conditions. The extreme …
Global debt ratios declined in 2021 on the back of the rebound in GDP. Falling bond yields dampened the rise in debt service ratios over recent years but that is now changing. We fear the corporate debt …
While some of the risk factors we spoke about last month – OPEC’s lack of cooperation and China’s lockdowns – have eased somewhat in recent weeks, growth and inflation concerns have continued to pile up, challenging policymakers and investors. The
Global economy is slowing, due to the fallout from the Russia-Ukraine war, supply bottlenecks and China’s zero-tolerance Covid-19 policy. CBs will tighten financial conditions to tame persistent inflation. A global recession is not our main scenario, but there are areas
Ongoing geopolitical tensions and supply-side shortages are leading to high inflation rates and a weaker economic outlook. In this tension field, central banks are tightening monetary policy. Weaker economic data could cause interest rate expectations to fall by the end
Growing uncertainty in markets has rekindled the age-old “active vs. passive” debate. In 2017, PIMCO published results of an exhaustive study that showed active U.S. bond mutual funds had largely outperformed their median passive peers over many years, whereas active
World events continue to remind us how connected we all are. We are emerging from a global pandemic, supporting victims of war and tragic violence, confronting social and economic inequities, and addressing climate change. These events underscore the importance of
ESG adoption is on the rise, fuelled by client demand and a desire to make an impact. As ESG momentum continues to gain steam, investors are refining and evolving their strategies. This can be seen in the implementation arena, where
Most assets have again delivered negative returns in both local currency and USD, with the notable exception of commodities (or more precisely energy and agricultural products). That was unfortunate for us, given that we were zero-weighted in commodities (having been
With inflation at multi-decade highs and growth already slowing, investors were rightfully sceptical about the Fed’s ability to aggressively tackle inflation without sending the economy into recession having waited too long. Now two hikes in and messaging front-loading future hikes
The past decade has been an exceptionally profitable period to be invested in global equity markets, with the MSCI AC World Index averaging 10.6% per annum in the 10 years to 31 March 2022*. Solid GDP growth, low interest rates
For the past couple of decades, China has been the driver of the health of the global metals industry as it accounts for roughly 50% of demand for a number of metals commodities. More recently, two other factors have driven
The 2020s so far have forced a global realization that threats posed by climate change are severe, urgent, and soon, irreversible. It is rather unusual to wake up to the start of the new year with a 13oC on the
Global growth is likely to slow alongside increasing geopolitical risk and uncertainty, tighter monetary policy, and a slowing Chinese economy. There is also a greater risk that inflation will remain higher for longer, given supply chain ….
Since the 1980s, the global economy has been fuelled by an asymmetric capitalism. Significant interventions by governments (fiscal policy) and central banks (rates and QE), particularly during the Covid pandemic over the last two years, have resulted in disparity of
Economic and Strategy Viewpoint Q2 2022 – The peak in global inflation is probably not far away, but there are several reasons to think that it will fall relatively slowly. Lockdowns in China have caused bottlenecks in global supply chains
Global first-quarter dividends jumped by 11% on a headline basis to a total of $302.5bn, a record for the seasonally quieter first three months of the year. Underlying growth, which adjusts for oneoff special dividends, exchange rates and minor technical
With environmental, social and governance (ESG) issues dominating the international policy agenda – and as investor demand for new ESG financial products and services continues to grow – global debt markets, and by extension fixed income portfolios, are about to
Global Asset Allocation: The View From Europe War, inflation and lingering COVID-19 impacts have set the stage for a challenging start to 2022 for investors, with both stocks and bonds down over 9% in response. While dynamic, stocks and bonds on
We are witnessing significant divergences in the economic outlook (we have revised down the EU and Chinese economic outlooks vs. the more resilient US economy) and in market performances. In particular: (1) Inflation expectations – short-term peak vs. long-term rise:
Q2 Strategy Outlook In the second quarter, there are two overriding themes: the geopolitical situation is more dangerous than many of us can remember, and markets are dealing with inflation not seen in at least 40 years. We believe investors
Schroders Recession Dashboard: what is it telling us? Deforestation: what could be the market impact of new EU ban? Which emerging markets are most at risk of defaulting on their overseas debts?
Global economic optimism declined in the first quarter of 2022. War in Europe added to already stiff inflationary headwinds from continued supplychain disruptions. A more hawkish tone from the Fed and other major central banks fuelled concerns of slowing global
Global Value Spreads Hypothetical AQR Industry-and-Dollar-Neutral All-Country Value Portfolio
Diversification is considered a core tenet of finance. However, if diversification is not done properly investors can find themselves surprised by ineffective portfolio positioning. We believe a factor approach supports true diversification by helping better understand underlying risk exposures and
Global equities retreated in the first quarter of 2022 in the face of higher inflation and the war in Ukraine. The US Federal Reserve has become even more hawkish despite the increasing threat of a significant slowdown in economic growth.
The uncertainty caused by the war in Ukraine, the sharp increase in commodity prices, and the deterioration of supply chain issues are dampening the economic outlook. At the same time, the inflation risks have increased drastically. The Fed has promised
In February 2018, Templeton Global Macro (TGM) released its original paper on the topic of environmental, social and governance (ESG) factors in sovereign fixed income investing. The paper (Global Macro Shifts—issue 9 [GMS-9]) explored the team’s novel approach to ESG
The war in Ukraine adds another supply-side shock and increases economic uncertainty at a time when macro policy is constrained by high inflation and strained public finances. Despite this, most stock markets are trading higher today than at the start
No doubt, war is a human tragedy. It requires heavy reflection on what has transpired and how it can be avoided in the future. However, the current situation also demands that, as fiduciaries, we delve deeply into what the implications
The Russian invasion of Ukraine and the subsequent war involving a global military superpower has created significant uncertainty for investors. The condemnation from the rest of the world has been united, backed up with punitive sanctions that most certainly will
Contents: Macroeconomic outlook pre-Russia/Ukraine conflict Impact of Russia/Ukraine Valuations Investment conclusions Appendix
Key takeaways: Strong returns in March 2022 for our flagship funds… … despite rates moving sharply higher…. … thanks to the team’s cautious view on interest rates…. … and a range of funds that is suited for a rising rate
China’s economy and equity market have grown substantially in size and prominence over the past decade. Mainland-listed China A-shares have likewise become more accessible to global investors during this expansion, broadening the opportunity set beyond offshore shares. As of Jan.
Active Ownership Report 2020: Welcome to our second annual Active Ownership Report, in which we report on our activities globally for the first time. The objective of this report is to inform our clients and other stakeholders of our stewardship
In spite of the ongoing COVID-19 pandemic throughout 2021, European equity markets were buoyant, recovering well from the extreme volatility of the previous year. The S&P Europe 350® was up 26.1% in 2021.
Cross asset allocation: Despite a volatile end to the year for markets, 2021 still was marked by strong equity market returns and above-trend economic growth. We expect the pace of growth to moderate in 2022. Central banks have begun removing
Russia’s invasion of Ukraine has shocked the world, and while the immediate concerns are the human toll on the Ukrainian people, the implications and aftermath will be felt far beyond the region. With the European continent being thrown into chaos
Global stock and bond markets slumped in February as the Russian invasion of Ukraine rattled markets, creating the prospect of a global commodity shock as Western nations moved to sanction Russia, among the world’s largest …
