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Capital Market Outlook

Your resource for the latest thinking from our experts on the markets and economy in the coming year and beyond

January 19, 2021

Growing Evidence of Reflation Success

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Growing evidence of reflation success; upside surprises to the level of consumer spending and earnings should continue to support equities into 2021; a variety of factors are manufacturing bullishness for industrials.

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January 11, 2021

Reflation Favors Commodities

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Policies aimed at raising inflation are likely favorable for commodity prices; some key questions that may affect this year’s market outlook; we do see positive trends building for economic and earnings growth into the new year supportive of an equity uptrend in 2021.

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December 21, 2020

Dollar Discoloration

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Despite several years of overvaluation that would typically make the dollar prone to a correction, the greenback may simply suffer some further discoloration. A good time to look back on the key lessons of an extraordinary year. Scenarios for the S&P 500 through 2022.

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December 14, 2020

Macro Views for 2021

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The global economy is expected to rebound in 2021, with the U.S. economy poised for its fastest rate of growth in decades. Globalization is alive and well for a number of reasons. The outlook for small-caps has gotten more constructive.

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December 7, 2020

Profits Surge Validates Financial—Market Ebullience

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Profits surge validated financial market ebullience; international equities remain historically undervalued compared to those in the U.S.; stronger business confidence is also behind one of the quickest Mergers and Acquisitions (M&A) recoveries in decades.

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November 30, 2020

U.S. Consumer: Locked and Loaded for 2021

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Real consumer spending growth in the year ahead could be the fastest we have seen in decades; foreign trade and immigration are important determinants of long-term economic growth and U.S. corporate earnings; investor sentiment has turned more bullish in November.

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November 23, 2020

Financial Markets Shaped More By Profits Than Coronavirus News

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Our expectations for improved economic and financial-market conditions are in line with typical business-cycle patterns; margins should help earnings grow into valuations; the nature of the pandemic and attendant shutdowns has disproportionately affected services spending.

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November 16, 2020

Vaccine Sparks Massive Rotation

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It’s historically typical for cyclical, Value and small-cap stocks to have performed well during the early stage of an economic expansion; we currently view the wider backdrop for equity risk appetite as positive overall; and U.S. companies have increasingly favored domestic projects over expansions abroad.

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November 9, 2020

Rapid Recovery Surprises Economists

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Leading indicators and rising global momentum point to stronger growth ahead; owing to the pandemic and U.S.-Sino geopolitical tensions, the state now controls the “commanding heights" of the economy, and China's Fifth Plenum communiqués stress quality, self-reliance, leadership.

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November 2, 2020

Housing Boom Leads The Recovery

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The housing boom leads the recovery, we attempt to explore the dualism that exists within key fundamentals that should ultimately dictate where asset prices are a year from now, and global growth and global earnings are inextricably tied to emerging market consumer demand, notably demand from China.

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October 26, 2020

The Fed’s Poker Face

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The Fed may welcome an inflationary shock over the next few years; we believe investors should think long-term and opportunistically leverage market pullbacks in the weeks ahead on Cybersecurity, Healthtech, Infrastructure and Platform economy (C.H.I.Ps); light at the end of the tunnel for earnings and valuations?

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October 19, 2020

Fed Survey Shows Progress On Income Inequality

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A Federal Reserve survey shows progress on income inequality; America is on the cusp of a political Year 2000 (Y2K) moment, portending more near-term volatility, and can coronavirus halt the urbanization megatrend?

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October 13, 2020

Labor-Market Recovery Continues but Pandemic Headwinds Persist

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The labor market recovery continues but pandemic headwinds persist; we observe ongoing economic developments in Brazil and Mexico, which may offer opportunities for investors over the longer term, and investors should consider what the U.S. business cycle expansion means for investment strategy.

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October 5, 2020

Stock Market Jitters Likely To Prove Just a Correction

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Stock market jitters are likely to prove just a correction, water scarcity is still a growing challenge globally, and trade restrictions on China seemed to squeeze U.S. semiconductor earnings in a key overseas market but near-term weakness has the potential to offer a solid opportunity for long-term investors.

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September 28, 2020

Commodities Benefiting From Reflationary Policy

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Commodities are benefiting from reflationary policy, the pandemic has dealt a serious blow to the emerging market consumption story, and the economic expansion could be stronger than the recovery out of the last recession.

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September 21, 2020

Cultivating the Future Economy

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The endogenous factors that drive U.S. business investment spending are mostly supportive heading into 2021; one key to U.S. competitiveness: Automation and Immigration; the pandemic affected back‐to school retail sales, which look different in composition and cadence than previous years.

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September 14, 2020

Are the Markets Too Complacent About Mounting Geopolitical Risks?

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The U.S. economy continues to prove more resilient than expected, helping to drive a rotation into more cyclical stocks; it's worth being mindful of geopolitical tension points, and we believe the next generation of U.S. infrastructure build-out will also focus on important information communications technology.

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September 8, 2020

Market Volatility: The Momentum Swing Across the Plains

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Government functioning will evolve in the years ahead and require a shift in investor mindset, the market rebound has been uneven across sectors and industries, and greater supply will be needed to meet the growing demand for faster, more accurate coronavirus testing but that will take time.

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August 31, 2020

What prompted the Fed to review its strategy and tools?

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What does it mean that the Federal Reserve is doubling down on their 2% inflation target, we've pointed to key exhibits that speak volumes about markets and presidential elections, and second-quarter gross domestic product results for most major countries confirm an expected trend.

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August 24, 2020

The Message From The Shortest Bear Market Ever

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The U.S. economy may be at a secular turning point, with stronger growth and higher inflation likely; the importance of geographic revenue exposures, currency effects and sector exposures; and as the economy emerges from recession, unlocking the economic power of gender parity is more critical than ever.

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August 17, 2020

Fed Reflation Efforts More Likely To Succeed This Time Around

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Cyclical stocks that benefit from higher inflation and stronger growth have begun to outperform, demand for extended reality devices appears to be well-placed to grow, and there remains potential support for higher equity values over the next 12 to 18 months, in our view.

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August 10, 2020

Europe Poised to Catch Up

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Europe has lagged but now appears to be in position to catch up, social distancing-cum-limited human contact as the new normal could mean increased demand for and acceleration of the adoption of robots and automation, and downward pressure on the greenback could provide tailwinds for corporate earnings.

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August 3, 2020

V for Housing

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Housing activity and prices are currently picking up, both bulls and bears seem to have enough ammunition to debate the make-or-break case for the economy, corporate earnings and valuation, and flows into sustainable and impact investing funds in 2019 were up fourfold on the previous year.

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July 27, 2020

Inflation Unlikely to Reach 2% Fed Target Over the Next Two Years

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Inflation is unlikely to reach the 2% Fed target over the next two years, we outline some key sectors and industries most sensitive to the election agenda, and there's a renewed appreciation for space in the industrial real estate market.

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July 20, 2020

Investing In A Post-Pandemic Synchronized Global Expansion

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New patterns emerging in the asset markets reflect a major change in the world economic outlook, health and policy developments highlight potential market catalysts for the second half of the year, and we explore the Biden tax proposal and what it may mean for investors and tax planning.

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July 13, 2020

Is Economic Activity Flatlining?

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Is economic activity flatlining, the pandemic has greatly accelerated the fusion of science and technology, and we expect the pace of decline to trough in the second quarter.

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July 6, 2020

Market Rewarding Reflation Beneficiaries

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The market is rewarding reflation beneficiaries, we expect electricity generated from hydrogen fuel cells to remain a fast-growing segment of the alternative energy mix, and we believe Treasury Inflation-Protected Securities' outperformance is likely over the next year if our positive economic outlook proves correct.

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June 29, 2020

Something Old and Something New

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Every recession is similar to and different from previous downturns, we see several factors emerging as foundation for a long-term advance for U.S. equities, and as a long-term bullish indicator, foreign demand for U.S. securities remains robust and supportive across multiple asset classes.

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June 22, 2020

What a Difference 100 Days Can Make For The Markets and Investors

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Major crises often lead to fundamental shifts in economic and social behavior, and we feel this time will be no different; there is potential for industrial stock performance to continue to improve, and the dollar may finally turn from a headwind for crude oil prices into a tailwind, in our view.

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June 15, 2020

In Claims We Trust

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Labor market data suggest the recession is already over, we see equities remaining in a higher trading channel owing to support by the A.B.Cs, and long-term exposure in many cutting-edge technologies and positions in their respective countries and companies seem to be leading the way.

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June 8, 2020

Conditions In Place For A Potentially Strong Global Expansion

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Global risk assets had been rallying hard, especially those more correlated with solid economic expansions; we expect to see a renewed focus on R&D by governments and businesses; and small caps are likely to be supported in the near term but still face headwinds.

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June 1, 2020

Moving Toward “Escape Velocity”

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Signs of a dramatic shift in the central banks' reflation efforts should raise the odds that inflation will finally increase to their targets, dynamics investors could have missed during pandemic headlines, and the Equity Risk Premium proves useful as it takes into account the level of interest rates.

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May 26, 2020

Going from “Wait and Watch” Stage to a “Path Forward” Stage

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This bear market may ultimately lead to a “Path Forward," the potential for new tensions to interrupt China's growth rebound and market recovery could cause emerging markets to lag further, and bottoming in the energy sector is considered a bright spot for markets.

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May 18, 2020

A Wake-Up Call

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Numerous factors suggest rising global public health risks, including pandemics; COVID-19's influence on the upcoming U.S. election and the U.S. fiscal policy programs enacted in response to the current pandemic are likely to limit the extent and duration of the current recession.

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May 11, 2020

Stopping Deflation

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This abundant liquidity combined with aggressive government spending could help support risk assets and the potential for a strong economic recovery; post the pandemic: debt, deglobalization, digitalization, demographics; higher muni yields may provide opportunities for investors.

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May 4, 2020

Macro Weakness vs. Market Rebound: Observations from Three Recent Crises

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Similarities with previous episodes suggest that investors should continue to look through the macro weakness; the ongoing pandemic will likely bring fundamental shifts in the global economy and behavioral changes among consumers and corporates; the new economy charges ahead.

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