Capital Market Outlook
November 12, 2019
IN THIS ISSUE
- Macro Strategy—Data show people at the bottom of the income scale are generally feeling better about the economy than those at the top, a significant shift from the past four decades when the reverse was true. This strength in the low- and moderate income sector is translating into relative outperformance so far this year by the stocks of companies that depend on them.
- Global Market View—China’s growth rate for the third quarter was its lowest in close to 30 years, and, we believe investors should expect the slowdown to persist. It should therefore not come as a surprise to see new lows recorded in the headline gross domestic product (GDP) figures in the years ahead. But, in our view, neither should come as a major cause for investor concern.
- Thought of the Week—With investor sentiment and positioning remaining relatively defensive, potential upside surprises to cyclical areas of the economy are not fully priced into equity markets, in our opinion. So if the conditions for better growth in the U.S. and globally continue to fall into place, we believe equity markets could have more potential upside through the end of the year.
- Portfolio Considerations—A more highly diversified overall portfolio across and within asset classes makes sense, in our view, given the high level of macro uncertainty still overhanging the capital markets.
The opinions are those of the author(s) and subject to change.
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