Fixed Income

The end of China’s exponential credit growth will impede structural rallies in Chinese stocks and commodities, but US superstar stocks’ bubble-like valuations will impede them too. Leaving European stocks as the likely structural outperformer. Plus: copper is correcting, NVDA is consolidating.

Is the BoE making a mistake moving toward rate cuts before the end of the summer? What would such a move mean for UK asset prices?

Today’s report recaps last week’s webcast and elaborates on its themes, delving into the empirical evidence underpinning our conviction that asset allocators should underweight equities sparingly and fleetingly. We remain tactically neutral and cyclically bearish.

We consider the relative merits of four different fixed income investments in the current economic environment: 2-year Treasuries, 10-year Treasuries, Baa-rated corporate bonds and current coupon Agency MBS.