Highlights Economic Outlook: The global economy is in a reflationary window that will stay open until mid-2018. Growth will then slow, culminating in a recession in 2019. While the recession is likely to be mild, the policy response…

Highlights Renewed deflationary pressures indicate that the Hong Kong dollar may have once again become expensive. The currency peg will stay and domestic prices will adjust as a release valve. Developing deflationary pressures and…

Highlights EM equity valuations are neutral. Relative to the U.S., EM share prices do offer some value, but this primarily reflects elevated valuations within the S&P 500. According to the cyclically-adjusted P/E ratio, EM stocks…

Highlights Portfolio Strategy Internal dynamics warn that a broad market consolidation phase has begun. The jump in growth vs. value stocks has provided an opportunity to shift to a neutral style bias. Transports have sold off…

Highlights Beyond the healthcare vote and its implication for Trump's fiscal stimulus, other risks lurk in the background. Market complacency is at historical extremes but Chinese reflation is rapidly dissipating. The euro could…

Highlights U.S. Treasuries: The surprisingly positive response from financial markets to last week's Fed rate hike should force the Fed to quickly shift back to a hawkish bias. Maintain an underweight exposure to U.S. Treasuries,…

Highlights Portfolio Strategy Contrary to popular perception, non-cyclical sectors have led the market so far this year, while deep cyclical sectors are breaking down, in relative performance terms. Our models point to more of the…

Highlights Fed: The Fed will deliver another rate hike tomorrow, but we do not expect a signal that a higher trajectory for the funds rate is necessary. The Fed wants to see higher inflation expectations and will remain as…

Highlights Monetary Policy: The Fed will lift rates this week, but will likely leave its median forecast for three hikes this year unchanged. With inflation still below target the Fed has an incentive to take it easy. Curve steepeners,…

Highlights U.S. equity valuations are historically high, based on a variety of metrics. However, relative to competing assets and global equity peers, U.S. stock valuations are not an extreme. For U.S.-based investors, our upbeat…