Insights

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67 news articles are available

May 2024 Cross Asset
05/16/2024 Cross Asset

Short-term resilience, but no reacceleration likely in the mid term

We have markedly revised up our forecast for US growth, in particular for H1 2024. We continue to expect GDP growth to decelerate below its potential pace over the next few quarters, before recovering in 2025. Regarding inflation, although the downward trend in core consumer price index inflation has recently stalled, we think that the disinflationary process will continue, albeit along a bumpy road with stickier dynamics. The Fed will still be in a position to pivot towards rate cuts and we expect 75 bps of cuts in 2024 (vs 40 bps by markets) as: (1) monetary policy remains restrictive and will become more restrictive as inflation declines; (2) growth will slow down; and (3) recent inflation data have not altered our year-end projections.

IT-Going Global wEquities
05/15/2024 Investment Talks

Going Global with Equities - May 2024

Due to factors, including significant stimulus and hopes over artificial intelligence, a handful of the top US stocks are experiencing significantly high valuations. While US investors should continue to have exposure to domestic stocks, the outlook for international stocks appears to be improving. With global valuations unjustifiably low, a potential recession ahead, and top US stocks currently posting excessive valuations, investors may wish to consider expanding the global reach of their portfolios to  opportunities in Europe and Asia.

May 2024 GIV
05/08/2024 Global Investment Views, Equity, Fixed income

Searching for bright spots in a trickier phase

Recent inflation and growth data from the US indicates continued strength in the economy, leading Amundi and various institutions including the International Monetary Fund, to revise US growth forecasts upward. We believe current strong momentum will continue into Q2, but expect a deceleration in H2. Inflation data also points to stickier prices, with upside risks, especially around oil, from the recent geopolitical escalation, opening a difficult phase for central banks. We expect fewer rate cuts but higher uncertainty around policy actions.

IT-Opportunities-Catastrophe
05/07/2024 Investment Talks

Opportunities in Catastrophe Bonds

As a structurally uncorrelated source of risk and return, we believe catastrophe bonds and insurance-linked securities (ILS) may permit investors to build more diversified and resilient portfolios.  This could be particularly true now, as the rate on line (the ratio of premium paid to loss recoverable in a reinsurance contract) for private ILS formats and the cat bond market spread remain elevated and could provide attractive total yield potential.  We believe the combination of continued elevated pricing, combined with the ongoing demand for reinsurance, may present an attractive investment opportunity throughout the remainder of 2024 and into 2025.

IT-Last mile
04/23/2024 Investment Talks

Remain agile in bond selection, with an eye on last mile inflation

Though the US economy and consumers appear to have largely defied the "gravitational pull" of significantly tighter monetary policy, we continue to view the risk of a recession during 2024 as higher than normal. We expect that such a recessionary scenario would lead to significantly greater interest rate cuts, while the "no landing" scenario of more persistent inflation would delay the start of rate cuts. As developed economy central banks continue to grapple with when to start normalizing local monetary policy, now could be an interesting time for investors to strengthen their portfolios by extending the duration of their fixed income portfolios and raising credit quality and liquidity profiles while carefully weighing global opportunities.

Apr24-Cross Asset
04/22/2024 Cross Asset

A window of opportunity for European equities

After a strong close to 2023 and a resilient first quarter, we expect the US economy to decelerate as we continue through 2024. The most vulnerable segments of the economy are showing signs of stress, although data on the broader economy remain mixed. We continue to expect inflation to moderate amid some volatility, particularly on the sticky services side, as domestic demand cools. We acknowledge the trend strength in risk assets, but high valuations are preventing us from massively shifting our risk gear upwards. The equity rally is broadening and we see a rotation towards European equities, where we have now a neutral stance.

IT-US HY Outlook
04/17/2024 Investment Talks

US High Yield Market Outlook and Positioning

Although first-quarter returns proved to be anemic, at least they were consistent. Across the quarter, monthly returns were positive and spreads moved tighter. With inflation's decline stalling, short-term rate expectations stabilized. Within high yield, Treasury yield increases largely negated the effects of tighter spreads, leading to returns near the index's coupon yield. Although CCCs were the best performers in the US and globally, the US High Yield Distressed Index  (comprised of issuers with spreads over 1000 basis points) underperformed the broader US high yield market, indicating investors were more interested in high-yielding bonds than in potential workouts.

GIV-April 2024
04/08/2024 Global Investment Views, Equity, Fixed income

The late-cycle environment continues to play out

Stocks are pricing in a rosy scenario in terms of economic growth, which has led to strong upside already this year, with some broadening of the rally evident recently. These movements are further aided by ample liquidity and robust earnings, particularly in the US. The messaging from the Fed and the ECB has been focused on how important it is for inflation to come down for them to reduce rates, even though the debate continues on whether the neutral rate has moved higher.

IT-Bonds Take Center Stage
04/05/2024 Investment Talks

Bonds Take Center Stage

For most of the last year, savers have been earning a reasonable return in cash. But how long can these compelling cash rates last? Historically, the answer has been: not very long. In every rate hike cycle since the 1970s, the US Federal Reserve has “paused at the peak” federal funds rate for a matter of months, not years, and history suggests the rate cuts could begin soon. With history as a guide, we believe investors may benefit from locking in some of today’s historically elevated interest rates by moving out of cash and into short-term bonds.