Investment Monthly March 2023
Global divergence has created ‘parallel worlds.’ Western economies face recession risks while the East enjoys a cyclical boost.
02 March 2023
Investment Monthly March 2023
- Market pricing is consistent with a ‘soft landing’ or ‘no landing’ i.e. growth can be more resilient than expected. We believe this is an uncomfortable position relative to the balance of risks and so we take a defensive view
- Notable risks of an earnings recession keep us cautious on DM equities. A weaker dollar and attractive valuations improves the EM equity outlook though, particularly in Asia where macroeconomic trends remain resilient
- Short duration fixed income is the “natural asset class” at this juncture. We like the short end of the US Treasury curve, with many parts of global fixed income delivering good yields despite spread compression YTD