Labor Market
I am a structural disbeliever in the US superstar stocks because these winners of the previous technology, Web 2.0, are unlikely all to be the winners of the latest technology, AI. But I would suspend my disbelief if the Magnificent-7 index reaches a new high and the bursting AI-bubble configuration is broken. Plus, a new recommendation is to overweight Global Healthcare (IXJ).
Our Portfolio Allocation Summary for June 2025.
Rising bond yields may present an even greater danger to the global economy than the trade war. With equity valuations no longer discounting much economic risk, investors should position themselves defensively.
Five questions, five answers from the road. We unpack what Europe’s biggest investors are worried about right now, from trade‑war whiplash to bund‑versus‑Treasury positioning; and where the real opportunities still lie.
Right now, the major stock and bond markets are more ‘anti-fragile’ than fragile, and the Joshi rule recession indicators signal that a US recession is not imminent. This justifies a neutral, or default, tactical weighting to both stocks and bonds until a major market does become fragile, or until recession risk elevates. The one major price trend that is fragile is the 65-day selloff in the US dollar, which justifies a tactical overweighting to the dollar.
Risk assets rallied hard following the Great Geneva De-escalation, but we are not enamored of risk assets’ risk-reward profile. Forward-looking survey data remain awful on balance and we continue to recommend a defensive asset allocation profile.