Highlights Portfolio Strategy The elevated ratio of market cap-to-GDP discounts strong growth far into the future, suggesting that a market validation phase may be lurking. Capital markets-sensitive stocks have had a good run, but…
Highlights The uptrend in consumer confidence has the potential to be lasting, and therefore lead to an acceleration in real consumption over the next several quarters. In contrast, the rise in business optimism is thus far built on…
Bank stocks have experienced a sentiment-driven surge since the U.S. election, supported by expectations for higher interest rates. However, lost in the exuberance has been a marked deceleration in credit creation. Total bank loan…
Highlights The global 6-month credit impulse is now in its longest upcycle in a decade. Given also that bond yields have had their sharpest spike in a decade, we would not bet on the upcycle lasting much longer. Lean against the rise…
Highlights Portfolio Strategy A battle between tighter monetary conditions and the anticipation of fiscal largesse will be a dominant market theme this year. Our high-conviction equity allocation calls do not require making a major…
Dear Clients, This is the final publication for the year, in which we recap some of the key developments in 2016 and their long-term implications. We will resume our regular publishing schedule on January 5, 2017. The China Investment…
Recommendation Allocation Highlights Growth was picking up before the election of President Trump. His election merely accelerates the rotation from monetary to fiscal policy. This is likely to cause yields to rise, the Fed to…