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Weekly market commentary: Sticking with reduced risk taking
The new regime of macro volatility is playing out. Business activity is slumping and higher inflation persists. Central banks are responding with aggressive rate hikes without fully acknowledging the growth damage required. Expected policy rates have jumped further since we downgraded developed market (DM) stocks in July – and recession risks still aren’t factored in. We reaffirm our reduced risk taking stance in our tactical views and favor credit over stocks. chart Business activity is already stalling in the U.S. and Europe, as business surveys show (left chart). Yet the Federal Reserve and the European ... (full story)