Capital Daily Treasury yields may fall as the Fed changes its tune Despite the FOMC suggesting otherwise, we expect the Fed to be cutting rates by the end of 2023, as the nascent trend of disinflation continues. This informs our forecast that the 10-year Treasury... 5th January 2023 · 6 mins read
Asset Allocation Chart Pack Equities may take longer to turn a corner than bonds A renewed pullback in global equity markets and rise in bond yields in December is set to cap off a historically poor year for returns from both “risky” and “safe” asset classes. In fact, once the... 22nd December 2022 · 13 mins read
Capital Daily We do not expect tech stocks to prolong the S&P 500’s pain We doubt the current bear market in US equities will be as deep or as long as that after the dot com bubble burst, partly because “tech-heavy” sectors did not push up the S&P 500’s valuation relative... 21st December 2022 · 5 mins read
Asset Allocation Update What to expect if US inflation really has peaked? The real returns from both US equities and 10-year Treasuries have often been quite good in the couple of years after past peaks in core inflation in the US, but the period following peak inflation in... 12th December 2022 · 6 mins read
Capital Daily A few reasons for caution on the China rally While investors in Chinese equities have had some more reasons to cheer of late, we doubt that they will reverse much more than a small fraction of their earlier underperformance relative to US stocks... 5th December 2022 · 6 mins read
Asset Allocation Chart Pack Outperformance of European equities may be short-lived Despite the rally that began in October continuing throughout November, US equities still underperformed their European counterparts in common-currency terms last month. Admittedly, exchange rate... 2nd December 2022 · 13 mins read
Capital Daily A lot of bad news already seems discounted in China Chinese equities have held up remarkably well in the past few weeks, despite a serious COVID outbreak that raises the risk of a lot of disruption to the economy. That might reflect how a lot of bad... 25th November 2022 · 8 mins read
Long Run Returns Monitor Long Run Returns Monitor (Q4) Our Long Run Returns Monitor provides our updated long-term projected returns for major asset classes, as well as a summary of the macroeconomic forecasts which underpin them. All projections in this... 25th November 2022 · 1 min read
Asset Allocation Outlook Bonds may outperform equities amid a global recession After moving in broadly the same direction for much of 2022, we think that the returns from “safe” assets will generally diverge from those from “risky” assets between now and around the middle of... 1st November 2022 · 25 mins read
Capital Daily Global markets may continue to shrug off China’s struggles Recent events in China arguably present some downside risks to our forecasts for global equities and bond yields. But we do not think that they necessarily signal a repeat of the “China hard landing”... 25th October 2022 · 6 mins read
Long Run Update We expect mediocre long-run returns from Chinese equities Although relatively low equity valuations sometimes point to a greater chance of outsized returns over longer time horizons, we do not think that this is the case for China’s stock market. After all... 20th October 2022 · 5 mins read
Capital Daily A further fiscal retreat in the UK seems only partly discounted We think that we could see a small boost for both Gilts and sterling if the UK government is forced to capitulate further on its plans for fiscal policy. 14th October 2022 · 7 mins read
Asset Allocation Update Sector allocation as the economic outlook darkens We think that traditional “defensive” sectors of the US stock market – consumer staples, health care and utilities – will continue to hold up better than “tech-orientated” sectors – information... 12th October 2022 · 6 mins read
Capital Daily Drama in Gilts highlights the strains in other bond markets While the turmoil in the Gilt market has been exacerbated by uncertainty over the UK government’s fiscal plans, it arguably underlines the challenges faced by central banks elsewhere in raising... 11th October 2022 · 6 mins read
CE Spotlight What might fracturing mean for the markets? Fracturing will be felt very differently by markets in different parts of the world. Sectors within US-aligned markets where ties with China are most likely to fracture could see significant ructions... 6th October 2022 · 23 mins read
Capital Daily Retreat in bond yields may be a little premature Despite the recent retreat in expectations for interest rates – which seems to be a key driver on the big bounce in equities this week so far – we still expect most major central banks to maintain... 4th October 2022 · 6 mins read
