We continue to expect China to deploy stronger fiscal and monetary stimulus to avoid prolonged deflation brought about by a liquidity trap and sub-zero growth. All the same, a lower-growth risk has been added to our ensemble forecast. We expect Brent to trade at $94/bbl in 2H23, and $120/bbl next ye...
High-Yield municipal bonds have performed well in recent years, but valuations are now stretched. We recommend an underweight allocation, though we prefer high-yield munis over high-yield corporate bonds....
European real GDP growth is stabilizing, so why would European equities continue to trade sideways for the remainder of the year? The answer lies with nominal growth and its impact on earnings....
Outperformance of Growth sectors most likely has run its course. It is time to shift Growth vs. Value allocation to neutral, downgrade Semis, and upgrade Energy to overweight....
Inspired by a client’s questions, we examine the rationale behind the implementation of the trailing stop governing our near-term asset allocation recommendations....
Investors should think probabilistically about the economy and financial markets. In the face of non-linear effects, the range of possible outcomes can be very large. A systematic application of Bayes’ rule can help improve decision-making....
Numerous divergences have opened up between global risk assets and global business cycle variables. These gaps are unsustainable, and odds are that the recoupling will occur to the downside with risk assets selling off....
The downgrade of the US credit rating highlights the risk of fiscal dominance overriding the Fed’s long-standing monetary dominance focused on its dual mandate. This threatens to push inflation and long-term interest rates higher. It also will redound to the detriment of the USD, and governments’ an...
In absolute terms, Mexican markets may correct given their impressive rally and an impending EM risk-off move. Relative to EM however, Mexico will continue to outperform given its unique cyclical and structural macro fundamentals, as well as attractive valuations....
