Given that the seemingly unthinkable can actually happen, we reassess how financial markets price uncertainty, and whether the current pricing is correct.
Please see attached our Third Quarter Strategy Outlook which discusses the major investment themes and views we see playing out for the rest of the year.
Brexit is putting our bearish short-term dollar view in question as global policy uncertainty has surged. Yet, investors are displaying elevated signs of risk aversion but the global economy still looks fine. This dissonance is…
What is liquidity? How is it created and destroyed? And when does it trigger turning-points in financial markets?
As the sole shock absorber left in the global economy, FX markets will grow more volatile. The currency market's reaction to the recent Fed minutes exemplifies this phenomenon. Despite its sores and blisters, the U.S. economy wins…
The equity bear case is obvious. Prices are approaching overhead resistance and face fundamental headwinds.
There are no indicators that consistently lead share prices or can differentiate cyclical bull markets from short-term oversold rebounds. Investors who are right on the big-picture view will be rewarded, and vice versa. From a big-…
The Fed backing off from rate hikes is a necessary but not sufficient step toward putting a floor under global risk assets. Equity market breadth measures are still very weak, suggesting the selloff remains broad-based. The bear…
It is highly unusual for equities to enter a bear market without the economy going into recession. Since we see the risk of recession as low, we recommend a neutral allocation between bonds and equities.