Sectors
Markets and forecasters anticipate a “Golden Age” for Trump’s America, with US growth expectations soaring while the rest of the world lags. However, this extreme optimism means that there is a lot of room for disappointment. Cooling income growth, weak housing and less deficit spending than expected will result in US growth underperforming expectations. Maintain a modest underweight to equities and modest overweight to fixed income. US markets have become more expensive relative to the rest of the world even as quality differentials have stabilized. Prepare to downgrade US equities to underweight and to upgrade Euro Area and China to overweight. We will wait to pull the trigger until we have more clarity on trade policy and when the dollar's momentum turns negative.
La versión más reciente del modelo MacroQuant sugiere que el mercado alcista de las acciones estadounidenses está llegando a su fin. El modelo espera que los rendimientos del Tesoro bajen más adelante este año, pero aún no está listo para adoptar una posición larga en duración.
La última versión del modelo MacroQuant sugiere que el mercado alcista de las acciones de EE. UU. está llegando a su fin. El modelo espera que los rendimientos del Tesoro caigan más adelante este año, pero aún no está listo para tomar posiciones de larga duración.
Jonathan provides an update on Canada following strong performance from Canadian stocks last year. On a tactical basis, underweight Canada versus global ex-US on the expectation of tariffs targeting Canada and Mexico. Following a sell off, or if a trade war is avoided, investors should place Canadian stocks on upgrade watch with the goal of moving to a modest overweight versus global ex-US.
Global risk assets are engulfed in a wave of euphoria, which is pulling Europe higher along the way. However, risks still abound. How should investors adjust their allocation to Europe under these highly uncertain conditions?
