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Are US Equity Investors Too Sanguine About US Economic Prospects?

Yes, it is likely that the “softish landing” implied by forward consensus earnings expectations will fail to transpire. In contrast, we anticipate a recession, given the decline in leading economic indicators and our view that the Federal Reserve will not be quick to cut rates to support activity. After adjusting downward in recent weeks, consensus […]

January 2023

Will Monetary Policy Become Less of a Headwind for Markets in 2023?

Yes. Markets will be less vulnerable to rising rate risk next year, as the aggressive tightening that has weighed on markets for much of 2022 has moderated more recently since inflation has slowed. However, we see a pause in tightening as more likely than a pivot to easing in 2023 because inflation will be slow […]

December 2022

2023 Outlook: Portfolio Wide

We expect most investors should maintain equity allocations in line with policy targets. Consistent with this idea, we believe investors with portfolios that are more diversified across risk exposures will tend to fare better than investors holding more correlated investments. Investors Following Rebalancing Plans Will Be Rewarded in 2023 Kevin Rosenbaum, Global Head of Capital […]

December 2022

2023 Outlook: Sustainability & Impact

We expect meaningful shifts in net zero and other sustainable and impact strategies toward more impactful implementation approaches. In line with this, we expect allocations to diverse managers to rise, as greater numbers of investors embrace stated investment policy objectives. Approaches to Climate & Net Zero Shift from Window Dressing to Real Change in 2023 […]

December 2022

2023 Outlook: Interest Rates

We expect interest rates will increase in many developed markets, as implied by market pricing. But we think the Fed will hold rates in restrictive territory for longer than expected. We don’t believe any increases will prompt another European sovereign debt crisis. US Federal Reserve Pauses, but Does Not Pivot in 2023 Celia Dallas, Chief […]

December 2022

2023 Outlook: Equities

We expect global earnings growth will be below average next year, as prior interest rate hikes increasingly bite. With this backdrop, we expect value equities will outperform, Chinese equity underperformance will correct, and Healthcare may present an overweight opportunity. Global Earnings Growth Will Be Below Average in 2023 Kevin Rosenbaum, Global Head of Capital Markets […]

December 2022

2023 Outlook: Credits

We expect most liquid credits will generate higher returns in 2023 relative to 2022, given the better yields on offer. We also see private credit as offering opportunities, particularly in secondary trading. Liquid Credit Markets Should Generate Higher Returns in 2023 Wade O’Brien, Managing Director, Capital Markets Research Many high-yield (HY) borrowers are prepared for […]

December 2022