Following the summer rally, risk assets once again overprice soft-landing prospects requiring a cautious stance on the part of investors going into year-end. Comments from Fed Chair Powell suggest that economic risks are increasingly skewed towards recession especially in Europe
Growth is slowing and inflation is climbing steadily due to the serious energy shock in late 2021. Central banks are starting to withdraw monetary stimulus and talking about rate hikes in the near future. The spectre of stagflation is re-emerging,
Looking back, private markets have experienced robust returns, with 2021 marking a high point. While there is no investible index in the same way as for public markets, the database of private markets funds, captured by Burgiss, reported investment returns
The Jackson Hole conference made it clear that fighting inflation, even if it leads to economic hardship, is priority number one for monetary policymakers. Except for the Bank of Japan, central banks will stick to their aggressive tightening path, …
Investors’ Outlook: The news flow ebbed over the summer but the headlines that did come through weren’t always positive. One small news item may have cheered us up, though: After 12 years under the European Union’s watchful eyes, Greece …
Een zachte landing van de wereldeconomie lijkt steeds onwaarschijnlijker. Dat betekent dat risicovollere activaklassen nog verder kunnen dalen. De stijging van de aandelenmarkten die begon met de hittegolf deze zomer is volgens ons voorbij. Vanaf nu zullen de omstandigheden waarschijnlijk
The next five years will be an uphill struggle for investors. High public and corporate debt levels, labour shortages, potential tax hikes and increased levels of state intervention will mean slower economic growth. Add to that the prospect of prolonged
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 …
Quarterly Fixed Income Perspectives from Capital Group’s fixed income team: The combination of persistently high inflation, aggressive central banks and tightening financial conditions is weighing on financial markets and global growth outlooks. While valuations across many sectors look compelling after
The bar for monetary authorities to make a dovish pivot is quite high, as evidenced by recent statements by Chair Powell, et al. Even if there was a pivot later this year it would still imply a decent moderation in
Introduction Welcome to another edition of Vantage Point, the quarterly economic and markets outlook from the Global Economics and Investment Analysis (GEIA) team. The past three months have seen a dramatic selloff of risky assets, driven largely by a recalibration of expectations
When Volatility Overstays Its Welcome, Opportunity Knocks Like many other market participants, we’re laser focused on inflation in the second half of 2022. While the July inflation reading came in below expectations, our optimism remains tempered. Much of the decline
This is very new for younger investors. Interest rates are rising at an alarming pace, as central banks admit that inflation is no longer just a series of transient shocks, but there is a risk that it becomes more ingrained.
Last month, we discussed how the market narrative was evolving and investors were beginning to put more onus on the challenges to growth. That trend continued in July as traders increasingly incorporated how restrictive monetary policy could slow activity. Towards
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
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 …
Inflation is the number one topic in financial markets and the biggest concern of central banks, which will stick to their tightening path even if it impacts the near-term growth outlook. The BoJ is the outlier in the developed world
Wat zal de financiële markten de komende vijf jaar stimuleren? Ontdek het in onze Secular Outlook, waarin we onze prognoses voor het rendement van alle grote activaklassen geven en de krachtige langetermijntrends analyseren die het beleggingslandschap zouden kunnen hertekenen.
Elevated economic uncertainty, rising inflation, and investor expectations of a downshift in global growth from the stellar rebound of 2021 were already underway at the start …
In our previous outlook, we encouraged investors to tune out “noise” and focus on “signal” — economic and asset class fundamentals evidenced in hard data. We continue to endorse this approach, but acknowledge that even the most diligent followers of
Much of the world continues to move past the COVID-19 pandemic, but its remarkable effects on economies and policies remain top of mind as a new set of uncertainties enters the picture. Historic pandemic-era moves by both fiscal and monetary
The first six months of 2022 were particularly challenging for investors, as central banks became increasingly determined to rein in inflation – sparking weakness across almost all asset classes. We believe the next six months will also prove tricky, while
On the surface, the decision by the Federal Reserve Open Market Committee (FOMC) to increase the upper bound on the federal funds rate by 75 basis points (bps) at its June 15 meeting seems almost anticlimactic in hindsight. By that
The world economy continues to suffer from a series of destabilizing shocks. After more than two years of pandemic, the Russian Federation’s invasion of Ukraine and its global effects on commodity markets, supply chains, inflation, and financial conditions have steepened
T o anyone who ever travels with children, the incessant question “are we nearly there yet?” will be a familiar refrain that punctuates any long distance car journey. It’s certainly a favourite of my seven-year old daughter. Now, I find
Cross asset allocation: Our pessimistic views on the direction of global growth have led us to change our scores for equities from neutral to underweight, and fixed income from neutral to overweight; commodities and cash remain neutral. While equity market
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 …
We started the year with expectations of strong growth and high inflation throughout the first part of 2022. The Russia-Ukraine war accentuated the inflationary trend, now well above Central Bank (CB) targets, which is now set to persist longer than
Welcome to our mid-year outlook. I’m pleased to share with you the findings of our latest Strategic Forum – that defines our views on the world’s economies and markets for the months to come. In our previous Strategic Forum in
Last month, we noted the end of an era. After more than a decade, the market’s main measuring stick for macroeconomic risk shifted from what the Federal Reserve might do, to what the Fed will be forced to do. It’s
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
You know that recession narratives abound when Cardi B is tweeting “When y’all think they going to announce that we going into a recession?”1 Even more pronounced is the “stagflation” hysteria. Major investment banks are publishing stagflation primers… an institutional
Our central scenario is that we avoid a severe global downturn thanks in large part to fiscal support, and a more gradual pace of tightening by the central banks in the second half of the year. With major markets having
United States: After the contraction in Q1 (resulting from an outsized detraction from net exports and a payback from the surge in inventories in Q4, not from weak demand) we expect sequential growth to pick up from Q2 and stabilise
We keep the probabilities of our central and alternative scenario unchanged versus last month but amend the narrative to take into account the evolving geopolitical situation (see Ukraine crisis tree).The new wave of Covid-19 in China and stagnation in the
Alongside the terrible human tragedy that has unfolded since Russia’s invasion of Ukraine, the war has also exaggerated many pre-existing trends. Some include the upward pressure on commodities and further disruptions to global supply gains at a time when inflationary
As bond ETFs turn 20 years old, we believe four trends will propel global AUM to USD 5 trillion by 2030 Twenty years ago, computerised stock trading was reshaping the unseen market plumbing that connects buyers with sellers. Pit-style trading
We need to remain humble and nimble as we assess the changing investment landscape and seek to fulfil our purpose: to create a better future through responsible investing. In addition to precipitating a devastating humanitarian crisis, Russia's invasion of Ukraine
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 to re-emerge, upside risks to commodity prices
Restrictive central banks and high inflation rates are likely to continue to weigh on the economic outlook. Macro outlook – The US Federal Reserve stays its course High inflation rates are increasingly permeating global economies, and sharp increases in commodity
In this CIO spring update, teams from across LGIM share some of our analysis. These include the following key points: To avert the threat of stagflation, central bankers face their biggest dilemma since the 1970s. The US dollar is likely
The second quarter of the year is becoming increasingly painful for tech stocks, recalling memories of the 2000s tech bubble bursting. The repricing of a more aggressive Fed stance has been brutal, real yields rose – the rate on 10-year
Diverging economic outlooks in Europe, US and China, along with persisting geopolitical risks, underscore the need to explore relative value opportunities across asset classes. On duration, we think investors should be flexible but no longer as short as they were
April saw the coordinated bond and equity sell-off continue as the ECB joined the increasingly hawkish tone out of the Fed and added to heightening growth concerns in the month. Indeed, this shifting in the growth-inflation balance is …
The chance to see a positive resolution between Russia and Ukraine has continued to decline. Conversely, ongoing geopolitical tension appear to be the new reality – so market participants will just have to get used to it. Unlike in recent
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
The first quarter of 2022 was tumultuous for the global economy and financial markets. The conflict between Russia and Ukraine spawned a rally in US Treasuries, but the disruption to metals, agricultural and energy commodity markets only spurred inflation further.
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
The year started with central banks turning hawkish, followed by Russia’s invasion of Ukraine, both of which destabilised financial markets. Many cyclical assets are now cheaper than when we last wrote and we are adding to equities within our Model
The world and markets continuously change, but over the first three months of 2022 there have been shocking shifts in the landscape and asset prices. Russia’s invasion of Ukraine caught many off-guard. Beyond the terrible hardships this war has already
