Highlights On a timeframe of a few years, a net deflationary shock is a near-certainty even if we do not know its precise nature or its precise timing. Hence, investors must build such a deflationary shock or shocks into their long-…
Highlights Global Inflation: The case for maintaining a strategic overall allocation to inflation-linked bonds (ILBs) versus nominal government debt in dedicated global fixed income portfolios remains intact. Global growth expectations…
According to BCA Research’s US Bond Strategy service, bond yields could overshoot their fair value in the near term. Maintain below-benchmark portfolio duration. All in all, the message from the valuation indicators in…
Highlights Duration: Treasury yields look fairly valued on several different valuation metrics and the yield curve discounts a much quicker pace of rate hikes than is currently signaled by the Fed’s “dot plot”.…
Highlights Structural headwinds are still too strong to hold a long-term bullish view on Eurozone equities relative to the US. However, the coming two years should be kind to euro area stocks. The relative performance of European…
Highlights Private-sector savings exploded during the pandemic, swelling the already large global savings glut. Reluctant to sit on excess cash, households shifted some of their funds into the stock market. With corporate buybacks…
The minutes from the March FOMC meeting, released yesterday, didn’t reveal anything new or shocking about the Federal Reserve’s reaction function. The minutes noted that both the Fed staff and meeting participants…
Corporate spreads have sent an upbeat message this year. Junk spreads continue to narrow, and they have recently tightened by the most in over a decade. Meanwhile, equity volatility has remained relatively elevated, which has…
Highlights Q1/2021 Performance Breakdown: Our recommended model bond portfolio outperformed the custom benchmark index by +55bps during the first quarter of the year. Winners & Losers: The government bond side of the portfolio…
Highlights Chart 1How Long Until Full Employment? It’s official. The vaccination roll-out is successfully suppressing the spread of COVID-19 throughout the United States and the associated economic re-opening is leading…