Populism/Inequality
Highlights Trade war between China and U.S. is back on; President Trump is politically constrained from making a quick deal with China; Italian uncertainty will last through the summer and beyond; But bond market will eventually price profligacy over Euro Area exit, which favors bear…
Highlights Divergence between U.S. and global economic outcomes is bullish for the U.S. dollar and bad for EM assets; Maximum Pressure worked with North Korea, but it may not with Iran, putting upside pressure on oil; An election is the only way to resolve split over Brexit and the new anti-…
Highlights The Philippines is seeing a genuine inflation outbreak. The Duterte administration's policies favor "growth at all costs." "Charter change," or constitutional revision, will stoke political polarization, erode governance, and feed inflation. We are neutral on Philippine stocks and…
Highlights The political path of least resistance leads to fiscal profligacy - in the U.S. and beyond. The response to populism is underway. The U.S. midterm election is market-relevant. Gridlock between the White House and Congress does, in fact, weigh on equity returns, after controlling for…
Highlights The cyclical bull market in stocks will last until the end of next year. That said, global equities have become increasingly vulnerable to a correction, so fast-money investors should consider putting on a tactical hedge spanning the next few weeks. The passage of tax legislation in…
Highlights The bill is bullish for growth and therefore for the equity markets and the U.S. dollar; The bill consists mostly of tax cuts, not reforms, that favor corporations and the wealthiest taxpayers; The bill is bullish for growth in the short term, but also inflationary and hence a risk…
Dear Client, In addition to this Special Report, we are publishing our monthly Tactical Asset Allocation table and supporting indicators today. These can be accessed directly from our website. Best regards, Peter Berezin, Chief Global Strategist Highlights Megatrend #1: Population Aging.…
Dear Client, This month's Special Report is written by my colleague, Peter Berezin, Chief Global Strategist. Peter highlights three key demographic trends that will shape financial markets in the coming decades. His non-consensus conclusions include the idea that demographic trends will be…
Highlights The macro environment remains positive for risk assets. Nonetheless, the shadow of the '87 stock market crash is a reminder that major market corrections can occur even when the earnings and economic growth backdrop is upbeat. Our base case remains that global growth will stay…
Highlights Easier financial conditions will lift U.S. growth in the second half of this year. However, given the Fed's dovish predisposition, aggressive tightening measures are unlikely until next year, when inflation will begin to accelerate. We see little downside for the dollar over the…