Sectors

Investors should be tactically tilting allocations towards Direct Lending, Distressed Debt, and Directional Hedge Fund strategies at the expense of Real Estate, Private Equity, and Diversifier Hedge Funds. Structural opportunities are emerging in Real Estate and Venture Capital.

The SIFI banks expressed confidence in their credit outlook for 2024 and expect that credit losses will crest soon, given the reserves they’ve already set aside. Their implicit embrace of the soft-landing narrative suggests to us that the consensus is getting closer to being set up for disappointment. We remain tactically equal weight equities and fixed income but think conditions may soon favor turning defensive.

Disinflation coupled with sticky wage growth is likely to result in either a second wave of inflation or layoffs and a recession. In the meantime, market expectations for sales, growth, and margins are overly optimistic and are inconsistent with macroeconomic headwinds. We recommend gradually realigning the portfolio to a more defensive stance.

Decelerating nominal sales, a peaking credit cycle, and very high valuations - Indian stocks will not escape the carnage when risk assets globally begin to sell off.

The SEC has just approved bitcoin spot ETFs, but does bitcoin have any ‘intrinsic’ value? In this Special Report we explain why the answer is yes, how bitcoin compares with gold, and why the bitcoin price could ultimately head well north of $100,000.

The US manufacturing renaissance, spurred on by reshoring, automation, and government spending, is running its course but progress has slowed on the back of tight monetary conditions and the manufacturing recession. The deceleration of these positive trends weighs on the outlook for the Capital Goods industry group, impeding its performance over the short term. However, we reiterate that positive long-term trends for the industry remain intact. We downgrade Capital Goods to a tactical underweight. It remains a strategic overweight.