Tactical Investment Strategy September 2019

Our macro view is that global growth will continue to moderate, with weakness emanating from core Europe and EM, where negative trade sentiment is most impactful and political risks are higher. The spillover effects of this pattern into U.S. data were more evident this month, with weakness in key U.S. labor and manufacturing indicators. Offsetting the trend toward a global recession is the coordinated efforts of central banks, which was evident this month in the ECB cutting rates, opening QE bond purchase operations, and China also making some notable policy moves aimed at monetary and fiscal stimulus. Rising macro risks and aggressive policy should continue to support core fixed income. From a positioning perspective, this suggests staying longer duration but being more selective on credit and non-core risk. Risk assets have some tactical upside into September given better technicals, positive news on trade, and central bank actions. Within equities, we remain tilted toward U.S. markets and carry a bias toward sectors that benefit in low or falling rate environments.

  • DATE: September 13, 2019

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