Capital Markets Executive Summary
Global equity markets continued to rise in Q2 2024, while exhibiting significant sectoral and regional trends. US large-cap stocks lead the charge, driven by robust corporate earnings and favorable inflation data. Growth stocks, particularly those linked to AI, outperformed. Our report explores thes
Strategic Asset Allocation View (7-years)
The 7-year outlook forecasts mid-single-digit returns for equities. With US equities at stretched valuations, profit growth will be pivotal with onshoring and lower labor flexibility versus AI-driven productivity gains as opposing factors. Government and investment grade bonds remain relatively attr
Macroeconomic Conditions
Global economic conditions reveal a slowdown in US economic growth, with cooling consumer spending, and resumed disinflation. Europe’s recovery remains fragile, while China’s growth lags expectations. Our analysis covers inflation trends, growth scenarios, and geopolitical impacts on market stab
Shorter-term View
Key issues and scenarios include the inflation trajectory, economic growth possibilities, and corporate earnings outlook. Our report also discusses AI adoption, geopolitical conflicts, and market reactions under various scenarios, from optimistic to pessimistic, resulting in a neutral tactical stanc
Equity Markets
We survey global equity market performance by geography, factors and sector, highlighting the strong results for US large cap stocks, particularly in the tech sector. The difference between market-cap and equal-weighted performance highlights the concentration now in the S&P 500 and the impact on va
Fixed Income Markets
Fixed income markets experienced high volatility in yields for government and investment-grade bonds despite flat performance for the quarter. High-yield bonds and leveraged loans performed well due to high coupon rates and stable spreads. Our report delves into yield trends and valuation metrics.
Alternatives & Private Investments
Hedge funds, private equity, and real estate showed varied performance. Long-short equity and macro hedge funds performed well., Real estate trends varied by sector, with office continuing to struggle. Our analysis includes new deal and exit activities in private equity which continues to perform we
Actionable Investment Opportunities
Investment opportunities include adding duration to fixed-income holdings and exploring private equity and credit strategies. Our report highlights the potential for bond price appreciation and attractive returns from private credit, providing guidance on optimizing portfolio allocations in the curr
