September 2024

In Section I, we discuss the economic and financial market outlook in the wake of Jerome Powell’s Jackson Hole speech. Equity investors may pursue a bullish rate-cut narrative for a few months, and it is possible that the economic data will remain consistent with a soft landing for a time. However, we recommend selling rather than buying such a rally, given an ongoing decline in labor demand that will ultimately turn recessionary. Investors should remain conservatively positioned. In Section II, we present a list of answers to questions that we have received about our equity portfolio positioning recommendations. We continue to recommend underweighting small caps, overweighting US stocks, and favoring defensive sectors. We are neutral growth versus value for now but expect to downgrade once clear recessionary dynamics emerge.