Four charts outline key observations and things investors should watch out for in the US, Europe, Japan and China.
The saying ‘sell in May and go away’ refuses itself to go away.
The US is shedding excess capacity at a faster rate than most of its developed world peers, which supports our outlook for inflation to strengthen and sharpens our focus on the risk of rates volatility.
Time-series and cross-sectional analysis support our expectation for US wage growth to pick up in the near future.
We believe the balance of secular drivers over the next several years is inflationary, as a range of factors that have suppressed prices over the past decade are reaching inflection points.
The weak transmission of growth to inflation in the developed world creates challenges for policymakers, raising the risks of a policy misstep.
A combination of cyclical, secular and political factors informs our underweight position in investment grade rated US Autos, which have recently underperformed the broader market (Exhibit 1).
The lowest quality segment of the US investment grade market – BBB-rated bonds – grew 62% between 2014 and 2018 and now represents 51.7% of the index.
Following a strong 2017, emerging market (EM) assets pulled back in 2018 as risk sentiment deteriorated amid headwinds from moderating global growth, domestic political risk and trade tensions. We believe investor concerns and repricing are overdone in light of the solid long-term fundamentals and more attractive valuations relative to developed market (DM) assets.
Stay connected on the latest market developments and investment themes
China’s growth is moderating in the near-term... China’s economic growth is decelerating as a result of both near-term cyclical challenges and structural shifts.
Our portfolio manager discusses what factors in the US economy may cause inflation to accelerate
Revolutionary technology may benefit financial services and supply chain
Access more insights from across GSAM
Select your role below for a targeted experience.