In this Q4 Strategy Outlook, we discuss where we stand on our recession call, the outlook for stocks and bonds in various scenarios, why investors are misunderstanding the impact of AI on corporate profits, whether the US dollar has…
Core Europe’s industrial sector will relapse in the coming months due to US tariffs and a strong euro. Investors can play the imminent deflationary shock by being long Central European bonds. They should, however, hedge the…
Although our recession conviction has risen, we conclude our strategy review by closing our equity underweight and our fixed income and cash overweights. AI momentum is too strong to have anything more than modest exposure to an…
Inflation expectations in the US remain reasonably well anchored and there are few signs of a brewing wage-price spiral. Thus, the near-term risks to growth outweigh the risks of higher inflation. Looking beyond the next year or two…
July US durable goods orders rebounded, but investment signals remain subdued and favor duration and tech. Orders fell 2.8% m/m after a 9.4% June drop, better than expected. Core measures excluding volatile components were…
Our Global Investment strategists caution that AI’s economic impact remains limited, and investor patience may wane before fundamentals catch up to valuations. While AI has dominated equity narratives in recent years, its…
The AI boom has had less of an impact on the economy than widely believed. This may eventually change, but the risk is that investors grow impatient before it does.
The Indian rupee remains vulnerable to further depreciation amid slowing growth, tight domestic policy, and fragile capital flows. Trade risks and a weakening external balance will likely keep INR underperforming EM Asia peers.…
We maintain our 12-month US recession probability at 60%. However, until the “whites of the recession’s eyes” are more clearly visible, we would refrain from moving to a fully defensive stance.