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VANTAGE POINT:
Pivotal Moment

Welcome to another edition of Vantage Point, the quarterly economic and markets outlook from the Global Economics and Investment Analysis (GEIA) team.

Featured Insights

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AI Equity Impact: Already Irrational?

The market may surge in the next few years as AI benefits become clearer and the market prices more of the impact.

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THE ALTA REPORT

The Alta Report: Anticipating Rate Cuts, January 2024

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Inflation pressures may grow from Red Sea actions

Chronically constricted Red Sea shipping lanes could raise the cost of Europe-Mid-East-Asia trade and slow the...

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US Equity Outlook: Another Magnificent Year?

2023 was far better than feared for US equities, albeit performance was heavily concentrated. What does 2024 have on...

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Will Treasury yields get guidance from Powell?

Since the Federal Reserve Open Market Committee (FOMC) July minutes release, US Treasury yields have been rising.

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When to extend?

The time to consider extending fixed income duration is now thanks to attractive income returns, potential for price...

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Macro Update on Market Volatility

Silicon Valley Bank collapse, explained.
 
 

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Monthly Market Roundup

 

April 2024

March Market Roundup

  • Global markets did well in March, with risk assets responding positively to global central banks’ assessment of disinflation remaining intact. Despite stickier-than-expected inflation prints in the US, global and US equities were up 3% on the month. European equities did even better, rising 4% to 5%.
  • Fixed income eked out small monthly gains as well, with high-yield and emerging market (USD) debt up nearly 2%. US Treasuries and Global Bonds did less well with gains of under 1%.
  • The two main drivers of global markets in March were the “AI effect” and the assessment, by major global central banks, that notwithstanding a few higher-than-expected inflation prints the broader disinflationary trend was still intact. For instance, at its March FOMC meeting, the Federal Reserve kept interest rates steady as expected, but their economic projections hinted at a more cautious approach to lowering rates.
  • In the Euro area, national inflation data (Germany, Spain, and France) was broadly in line with expectations, supporting a gradual disinflation in headline measures, and remaining price stickiness in the service component.
  • Finally, the Bank of Japan (BoJ) ended its negative interest rate policy and scrapped its yield-curve-control framework in a notable step towards policy normalization. However, we do not see this as the start of a prolonged hiking cycle.
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Points of View

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Points of View: On the cusp of a productivity boom?

The promise of AI (and other reasons for optimism)

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Points of View: Japan's Yield Curve Control – Bidding A Long Goodbye

Inflation persistence and the weakening Yen are unlikely to result in a dismantling of the Bank of Japan's Yield Curve...

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Points of View: Economic outlook, central bank stances diverge

Divergent inflation and growth dynamics have and will continue to position major central banks along contrasting...

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De-dollarization is Not Imminent, But the Debate Will Linger

Every few years, market doubts about the U.S.’ macro excesses and foreign policy follies crop up and raises the specter...

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Food Price Shocks: Macro and Investment Implications

This note details our latest analysis of prolonged food price shocks and their impact on macro and investments.

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A Deep Dive into QT

In this third note of three, we review the arguments behind these opposing views in the previous two, in the hope to...

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Could QT lead to a steeper yield curve?

In the first note in a series of three on QT we argued that QT will most likely contribute to a flattening of the yield...

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The Impact of QT on Financial Markets

We have written extensively on our expectations for future rate hikes and the peak in US rates. In this paper, the...

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Yield Curve Inversion... This Time Is Not Different

We believe the possibility of a recession in the US over the coming two to three years is increasing. As such, we take...

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Global Economics and Investment Analysis Group

Meet the minds behind the research.

Shamik Dhar

Chief Economist

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Aninda Mitra

Head of Asia Macro & Investment Strategy

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Sebastian Vismara

Senior Financial Economist

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Jake Jolly, CFA

Head of Investment Analysis

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Matt Forester

Head of Dynamic Portfolio Management

Keith Collier, CFA

Head of Asset Allocation Research

Bethany Woodcock

Emerging Leaders Program Rotational Analyst

Ryan Milgrim, CFA

Senior Research Analyst

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