Developed Countries

Sentiment toward stocks is depressed and European valuations have declined substantially. However, the earnings outlook remains poor. Which side will win?

Long-after-the-fact revisions to reported income, spending and savings data do not alter our assessment that a flush consumer will continue to support the US economy and allow S&P 500 earnings to surprise the bearish investor consensus.

OPEC 2.0’s decision to cut 2mm b/d of output beginning in December telescopes the loss of Russian volumes we expect over the course of the coming year. OPEC 2.0 clearly is not playing by the G7’s or the US’s rules. This will keep prices volatile.

Investors should overweight US defense stocks in a world where US war-weariness is declining and the Biden administration is likely to exhibit an increasingly hawkish foreign policy.