Equities markets have priced in a US recession, which we believe is premature given strong labour market data and low real interest rates, although recent housing weakness is a concern. At the same time, our investor sentiment indicator remains oversold.
In our view, the current recovery in stock prices has further to run; we again bought equities, increasing our above benchmark allocation, funded out of commodities. We may look to sell into rallies, as stronger economic activity in 2019 would probably spur a resumption of US rate hikes, ending the current business cycle.
You can access up to date views from Trevor on the market and the movements of the Investment Clock on our Latest Investment Clock updates page.
|Absolute Return Strategies (including cash)|
Directions of arrows show overall change from previous tactical change. For individual portfolio changes, please see factsheets.