In this quarter’s End of Q2 Economic Outlook you will find:
- Investors were caught up in a whirlwind, which included both volatility and surprising countertrend movements — ranging from German bunds to Chinese equities, currencies to the price of oil.
- The relative resiliency of eurozone equities in the face of the bond-market decline has a simple explanation: The regional economy is starting to improve, albeit in a slow and halting fashion.
- Our equity investment managers generally remain pro-cyclical; momentum appears expensive in the U.S, but competitively valued overseas. Larger Asian economies look favorable, while energy-sector reverberations continue to be responsible for many global pressures and opportunities. Investors in emerging markets will need to continue playing country-, sector- and company-specific opportunities, as opposed to riding a general wave of prosperity and growth. Fixed-income managers have noted liquidity concerns that are largely unrealized. Duration is modestly short, and the U.S dollar’s ascent is expected to continue.
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If you would like to read an extended version of the Q2 Economic Outlook, please click here.