Research Highlights

A just-published report concluded that while it is tempting to bet on a continuation of recent equity market momentum, i.e. favoring the U.S. and technology stocks within a global equity portfolio, this strategy has a poor risk-reward profile going forward. We believe that it is prudent to take advantage of supportive monetary policies to diversify……

The Fed confirmed on Wednesday that it is now just focussing on maximizing employment, rather than also trying to bring inflation back down to 2%. A just-published report noted that even as the FOMC voted to lower its policy rate, it also upgraded its economic outlook, lowered its forecast for the unemployment rate and even……

A just-published report updated our outlook for the U.S. labor market, concluding that the labor market is in a non-recessionary low hiring funk, with overall policy uncertainty keeping firms cautious and low immigration restraining labor supply. It is only at the very front of the age distribution (workers aged 20 to 24 years) where there……

A just-published report updated our absolute return portfolio, which remains positioned for a pro-growth backdrop. However, we acknowledge that the environment is becoming increasingly frothy and risk asset market valuations are stretched. Nevertheless, already plentiful liquidity conditions are set to receive another shot of stimulus with the Fed set to resume lowering its policy rate…….

A just-published report noted that U.S. corporate profits remained solid in Q2 despite increased tariffs and choppy economic performance during the quarter. The outlook is still fairly positive, albeit expectations are elevated, underscoring that the equity market could hit some bouts of turbulence if earnings suffer even minor disappointments. S&P 500 companies delivered better-than-expected second-quarter……

A just-published report examined the key drivers of economic and capital markets’ performance. The challenge for investors is that these variables are difficult to forecast. These known unknowns include the rate of productivity growth in the major economies, the related potential GDP growth rate, the size of the output gap and its relationship with inflation, the……

Last week’s U.S. CPI report was widely seen as benign and consistent with imminent Fed easing, which helped to sustain gains in risk asset markets. This spin ignored the fact that the report again confirmed that underlying inflation has flattened off well above the levels of recent decades as well as the Fed’s 2% target……

A just-published report examined the prospects for the U.S. labor market in view of the sharp deceleration in payroll growth this spring. Our research highlighted that weaker employment gains since May were a symptom of the spike in trade policy uncertainty (which has since ebbed somewhat) as well as a U-turn in immigration, rather than……

A just-published report examined the growing prospects that the U.S. Federal Reserve will lose its independence and be forced by the administration to slash its policy rate, regardless of economic conditions and the inflation outlook. Removing the Fed’s independence and slashing policy rates would drive short-term interest rates lower but would risk a bond market……

A just-published report updated our views on EM currencies. While the solid rebound in the EM currency basket this year means that these currencies are now overbought, we anticipate more upside ahead and reiterated our overweight stance on the EM within a global FX portfolio. A combination of cyclical and structural tailwinds will support the……

A just-published report examined a number of topic global investment issues and updated our investment recommendations. Two hot topics this week were: the independence of the U.S. Federal Reserve and whether Chair Powell would be fired; and the issue of who really pays for higher U.S. tariffs. The answer to the second question is clear:……

A just-published report updated our global investment recommendations and strategy. After a string of political “wins” and the rekindling of animal spirits in financial markets, it was not surprising that President Trump would return to the tariff war. In contrast with earlier this year, however, investors are mostly ignoring the rhetoric, as Trump has provided……

A just-published report argued that it has been challenging for investors to assess economic growth prospects and their impact on financial markets because the U.S. has experienced massive policy crosscurrents in recent months. Fiscal, monetary and trade policies are all in flux and the report helped frame these crosscurrents and provide an investment outlook.

A just-published report updated the performance of our MRB TradeBook over the first half of the year, highlighting that once again the portfolio outperformed the global multi-asset benchmark portfolio with much lower volatility. Global financial markets have experienced major swings so far this year, due to extreme policy shifts. One big theme this year, which……

A just-published report updated our view on Fed policy following the latest FOMC meeting. The policy rate was left unchanged, but the DOT plot shows that two rate cuts are anticipated by year-end. The FOMC has a dovish bias and has been looking for an opportunity to cut rates further. The economy and, more recently,……

A just-published report provided an update of our views on the U.S. exceptionalism trade. The latter was a long-running theme that resulted in significant overvaluation of U.S. assets, in both absolute terms and relative to global alternatives. U.S. policies this year have provided a wake-up call for global investors, highlighting the danger of holding excessive allocations……

A just-published report updated our multi-asset recommendations and the main highlight was an unwinding of our tactical move taken in March to protect against what had become an increasingly dangerous tariff war. The U.S. administration has since pivoted and although elevated U.S. policy uncertainty will persist, a resilient U.S. and global economy should support risk……

A just-published report updated our outlook for U.S. corporate profits following yet another solid quarterly performance. Although analysts have lowered S&P 500 EPS estimates for 2025 and 2026, consensus forecasts are still too optimistic based on our analyses. Such forecasts include the implicit assumption that already historically elevated profit margins will increase significantly further, which……

A just-published report updated our global fixed-income strategy. While the U.S.-led trade war is not over and may yet witness some steps back (such as occurred late last week), the risks to long-dated government bond yields are tilting to the upside. Bond market drivers are shifting from worries about a global recession and expectations of……

A just-published report provided an update on our global investment stance, noting that risk-on could persist for a while longer barring a flip back by President Trump to aggressive tariff threats and actions. One unique pattern throughout the post-pandemic economic expansion has been the persistent front-running of Fed rate cuts, despite the largest rise in……

A just-published report provided an update on our investment stance, noting that the recent easing in tensions over U.S. tariffs had reduced some economic downside risks, providing a lift to risk asset prices. However, the trade war is far from over and economic uncertainty will remain elevated. The report provided a scenario analysis as a……

A recent report argued that growth challenges, brand disruption, regulatory risks, and decelerating fundamentals make the consumer staples sector’s earnings less predictable than in prior years.  Macro uncertainties amid rising global trade tensions have supported the year-to-date outperformance of U.S. consumer staples stocks. However, the move lacks fundamental support. The sector’s forward earnings momentum is……

A just-published report updated our investment recommendations, which remain defensive given the ongoing trade war and the slide towards a stagflationary environment in the DM world. Market rioting, especially the Treasury market, finally pushed President Trump to pullback on escalating the tariff battle and halted (for now) his calls to end Fed independence. However, heightened……

A just-published report updated our investment recommendations and overall macro view. The critical issue, aside from the risk of a full-blown global trade war, is whether inflation will fade way and allow developed market (DM) central banks to cut rates further, providing support to the global economic expansion. Ominously, the U.S. may be losing a……

The Fed has lacked a framework to guide its policy this decade and, thus, has been far offside in terms of understanding the inflation risks. Moreover, it has also misjudged the economy’s underlying strength. Consequently, it has been forced to pivot a number of times, with yet another pivot underway in the hawkish direction. A……