The Autumn Hard vs. Soft Landing Puzzle

Thursday 08 September 2022

Global Investment Views, Equity, Fixed income


The Autumn Hard vs. Soft Landing Puzzle

September 2022 | With the Q2 earnings season still showing positive trends, the buoyant market environment has translated into looser financial conditions, further complicating the task for central banks. Now that the Fed has reasserted its hawkish stance, we are starting to see some further downward movements, which we think may continue. At this point, we see no positive triggers to keep the rally going, while there are rising risks moving into autumn amid a gloomier economic backdrop.

01 |  Amundi Institute Insights: Central banks remain committed to fighting inflation. Our expectation points to hitting a terminal rate of about 1.5% at year-end, and a 0.75% hike in September is now on the cards.

02 | Fixed Income: Elevated inflation, aggressive Fed and ECB, and market expectations are driving yields and risk assets. While we are neutral on duration, we are active and tactical in adjusting/upgrading our stance depending on the extent of yield movements.

03 | Equity: The Fed has clearly indicated its resolve to control inflation, but earnings estimates still look too optimistic and will be revised down. We think in this environment investors should maintain a focus on earnings and valuations.

The Autumn Hard vs. Soft Landing Puzzle

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of September 8, 2022. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.

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