Taking out insurance?
Economies have been slowing worldwide and the slowdown is centered on global manufacturing and trade. Where does all this leave investors?
Monthly Market Roundup
Dovish Central Banks Supporting Markets
- Global equities gained in June due to a synchronized dovish stance from major central banks; a weaker U.S. dollar; and a temporary trade truce between the U.S. and China.
- The S&P 500 had its best first half performance in 22 years.
- The 10-year Treasury has declined YTD and, in June, reached its lowest level since November 2016.
- Trade uncertainty, tariffs, and lower domestic demand are contributing to the weakening economic backdrop.
- Going forward, the size and effectiveness of China's next round of stimulus and the continued strength of the U.S. consumer will be key to stabilizing growth.
- Markets are increasingly dependent on an expectation of global dovish central bank policy to provide the next leg upward.
Points of View
U.S. equities: Why we still expect a positive calendar year…
While longer-term valuation measures show historically elevated valuations and thus imply lower future returns, lower real discount rates means equilibrium equity valuations are higher than in the past.
U.S. Treasuries: Why we think recession fears are unjustified
Given dramatic moves in risk markets, we provide a brief update of what we think markets are currently pricing in along with implications for investing.