Asset Allocation Outlook The implications of AI hype for asset returns Q2 looks set to go down as a decisive victory for “risky” assets over “safe” ones, thanks in large part to euphoria in the stock market over Artificial Intelligence (AI). But we suspect that the story... 27th June 2023 · 1 min read
Asset Allocation Update Another look at the underperformance of Gilts Although we no longer expect Gilts to outperform in local-currency terms, we do think they’re set to hold up better against Treasuries and Bunds over the rest of this year than they have done lately. 15th June 2023 · 5 mins read
Capital Daily Sticky UK inflation is unlikely to keep Gilt yields higher forever The 10-year Gilt yield has continued to march higher on the back of recent data releases, outpacing the equivalent Treasury yield and putting upward pressure on the pound against the greenback. But we... 13th June 2023 · 6 mins read
Event UK Drop-In: The BoE's June meeting – Policy rates, mortgage rates and the macro outlook 22nd June 2023, 3:00PM BST With inflation still running hot, the Bank of England has little choice to keep raising interest rates. But how high will policymakers take Bank Rate, and – with headlines dominated by news of 6%...
Capital Daily US small caps may have made a false start After sitting out most of this year’s stock market rally, US small caps have shown signs of life this week. We think they might falter in the near term, but see reasons to be a bit more upbeat on... 8th June 2023 · 6 mins read
Asset Allocation Update Mega-cap outperformance: lessons from history In a recent Global Markets Update, we analysed the remarkably narrow rally in the S&P 500 so far in 2023. We concluded that recent history supported our forecast that the rally will run out of steam... 2nd June 2023 · 4 mins read
Asset Allocation Chart Pack Odds look stacked against risky assets Aside from the US stock market – which is being propped up by a handful of big name stocks and a serious dose of AI fever – most risky assets have struggled over the past month or so. We don’t think... 1st June 2023 · 12 mins read
Event EM Drop-In: The case for EM equity outperformance 1st June 2023, 3:00PM BST During our latest monthly dive into the big themes in emerging markets, the team discussed the macro and market forces that could see EM equities breaking their recent run of underperformance against…
Capital Daily Economy taking a back seat for the US stock market for now The recent performance of sectors within the S&P 500 is hard to square with either the economic outlook or TIPS yields. We suspect it reflects shifts in sentiment around the tech sector, which may... 22nd May 2023 · 5 mins read
Asset Allocation Update Making the case for EM equities Emerging market equities have typically outperformed their developed market counterparts after US recessions. While we don’t foresee them replicating the sort of outperformance seen after the early... 19th May 2023 · 5 mins read
Asset Allocation Update We think Gilts are poised to outperform We think that investors are underestimating the scale of interest rate cuts in the UK next year. If we’re correct, that could propel Gilts to the top of the class for local-currency returns over the... 12th May 2023 · 4 mins read
Asset Allocation Update Relative resilience of US stock market is on shaky ground The underperformance of the US stock market seen last year has generally paused so far in 2023, as returns have been propped up by mega-cap “growth” stocks. That may continue over the rest of the year... 4th May 2023 · 5 mins read
Event UK Drop-In: Will the BoE take rates above 4.5%? 11th May 2023, 3:00PM BST The market has finally come round to our long-standing view that Bank Rate will rise to 4.5%, with the Bank of England to likely to deliver another 25 basis point hike when it meets on 11 th May. But…
Asset Allocation Chart Pack 2023’s rally in US equities is looking a little thin The MSCI USA Index has not made much further headway on net in April so far. But it has at least held on to its strong gains from earlier in 2023, returning about 8% YTD. Part of that strength... 28th April 2023 · 13 mins read
Asset Allocation Update More than pensions to the UK’s stock listings drought In our view, the role of UK pension funds in deterring firms from listing on the London Stock Exchange has been overstated of late. To the extent that higher valuations are the reason firms find a US... 28th April 2023 · 6 mins read
Where's the credit crunch? Are First Republic’s problems a sign of a wider credit crunch? Lots of smart people think so. Here’s Adam Hoyes of Capital Economics: “Deposit outflows at First Republic Bank don’t tell us much more... 27th April 2023 · Financial Times
