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 o
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
Capital Markets Executive Summary
Global equity markets gained 8.1% during the quarter, led by a 10.4% rise in US large-cap stocks. Despite strong initial performances, markets retreated by 5.1% in early April amid rising US inflation and geopolitical tensions. In fixed income, the Barclays US Aggregate Index saw a 0.8% decline in
Strategic Asset Allocation View (7-years)
Over a seven-year forecast, the focus shifts towards intermediate-duration Treasury notes and new private investment strategies due to evolving market conditions. With U.S. equities and government debt expected to generate mid-single-digit returns, we adjust our allocation strategy to capitalize on
Macroeconomic Conditions
The US economy demonstrated robust growth, with a 3.4% annualized increase in Q4 2023 and continued strength into Q1 2024. We also explore economic performance in Europe and China, noting Europe’s recovery from near-recession and China’s Q1 GDP growth of 5.3%, which exceeded expectations.
Government Policy and Wealth Taxes
Recent proposals by President Biden aim to implement a minimum 25% tax rate on ultra-high-net-worth households. The narrative extends globally with various states and countries moving towards higher capital gains taxes to fund social initiatives, reflecting a worldwide trend towards more aggressive
Shorter-term View
Combining key issues with potential future scenarios, we forecast market movements influenced by inflation trajectories and economic growth patterns. Detailed scenarios range from optimistic projections of robust GDP growth and moderate inflation to pessimistic forecasts involving reaccelerated inf
Equity Markets
The S&P 500 surged by 10.4% in Q1, though it faced a 5.4% decline in early April due to inflation concerns and interest rate hikes. We scrutinize equity valuations with the S&P 500’s market-cap weighted P/E ratio at 19.8x, indicating slight overvaluation compared to historical norms.
