Insights for professional partners

We can see a path to a new bull market in the second half of 2023, but we’re not there yet.

In the midst of what continues to be a turbulent year for investors, our lead article explores the varied challenges facing some of the world’s major economies, and the likelihood of different inflation and recession scenarios coming to fruition.

Our latest Insights highlights why we still see US or global recession as unlikely over the next 12 months, despite what you might be reading in the headlines of the financial press. In any case, no two downturns are the same (each is unhappy in its own way), and a crucial point that often goes missing in the current debate is that it’s still too early to be clear about what kind this one will be, and therefore how to properly defend portfolios against it.

In the midst an unfolding humanitarian crisis, our thoughts are first and foremost with the people of Ukraine. But we also have a duty to our clients to monitor the investment impact of the war, and we set out some of the investment implications of these challenging times in our latest Investment Insights publication.

It’s been a difficult start to the new year for investors, with the global equity benchmark falling into so-called ‘correction’ territory. We can't say for sure when the pain will end, but for the reasons set out in this update, we are confident the correction will be short-lived.

Our lead article looks at the buzzword of the moment — stagflation. As investors’ fears of the potential stagnation of output coupled with rising inflation ebbed and flowed, equity and bond markets experienced some volatiliy. What will this uncertainty mean for the year ahead?

Our lead article explains that as China’s recovery slows, policymakers there look unlikely to stimulate growth by loosening either the monetary or fiscal purse strings.

In our first article, we explore how benchmark US government bond yields spiked as investors braced themselves for the release of pent-up consumer demand, encouraged by Joe Biden’s $1.9 trillion stimulus package. We take a look at where US bond yields and interest rates may go from here, and what that means for equity investors.

Markets have rallied strongly as investors look forward to better days ahead. It’s often difficult to work out what’s happening in the middle of a crisis, and we don’t know what will return to normal and what will have changed forever.