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Long Run Returns Monitor (Q2)

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 publication are as of 9th May 2022. See a more detailed explanation of our views in our Long Run Economic Outlook and Long Run Asset Allocation Outlook.
Oliver Allen Markets Economist
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More from The Long Run

Long Run Update

Productivity in the pandemic

It is still too early to assess the lasting impact of the pandemic on productivity in developed economies. But we remain optimistic that the legacy could be a positive one.

24 June 2022

Long Run Update

Which COVID-behavioural changes are permanent?

We argued two years ago that the pandemic would accelerate changes that were already underway rather than trigger behavioural changes out of the blue. Now that most restrictions have been removed in advanced economies, spending on services and recreation are recovering quickly as we expected. The shift to hybrid working seems set to persist, but there is little evidence that this has affected productivity growth in either direction so far.

6 May 2022

Long Run Focus

How inequality affects the long-run outlook

Substantial fiscal support helped to prevent a big rise in income inequality within developed economies during the pandemic. But inequality was rising in many DMs before then and could revert to that trend if technological advances disproportionately benefit the better-off. While trends in inequality are unlikely to be a major determinant of long-run economic performance, high or rising inequality could still weigh slightly on economic growth and contribute to equilibrium interest rates staying relatively low.

3 May 2022

More from Oliver Allen

Capital Daily

Growth might underperform value for a while yet

While US equities have fallen across the board today, “growth” stocks have continued to fare even worse than their “value” peers. We think that this underperformance has further to run, given that the relative price/earnings ratios of US growth stocks are still unusually high, and that there seems more scope for their earnings to disappoint. Markets Drop-In (11th May, 10:00 EDT/15:00 BST): We’re discussing our Q2 Outlook reports and what they say about the potential performance of bonds, equities and FX rates as inflation peaks in a special 20-minute briefing on Wednesday. Register now.

9 May 2022

Asset Allocation Update

S&P 500’s valuation suggests downside but not disaster

While the valuation of the S&P 500 appears high in absolute terms – even after the falls in the index in 2022 so far – it seems far less stretched once the still historically low real yields of US Treasuries are considered. And it would probably take a much larger adjustment in Fed policy than we anticipate over the coming years to change that markedly. With this in mind, although we expect the S&P 500 to decline a bit further over the next year or so, we are not anticipating a big multi-year bear market in US equities.

28 April 2022

Capital Daily

We do not expect a swift rebound in US equities

Although the further dip in the S&P 500 so far today means that it has now fallen by more than 11% since its high at the start of this year, we think that the index is unlikely to recover significantly any time soon. This is for three main reasons.

25 April 2022
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