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.
On March 22, the US Administration announced a 25% tariff on approximately $50 billion of imports from China. China retaliated on April 4 with a reciprocal 25% tariff on $50 billion of US products. Tensions have since escalated, with President Trump threatening an additional $100 billion tariffs on Chinese imports. The Chinese government has formally stated that while it does not want a trade war, it will retaliate if further action is taken.
With tax reform enacted, budget caps raised and regulation rolled back, the US Administration has shifted its focus to trade policy, which has turned more hawkish in 2018.
Our Emerging Markets Equity team returned with insights from the GSAM India tour, taking 21 clients to meet with India’s most senior leaders of corporations and the political establishment. Our excitement in the investment opportunity has been invigorated as we observed in detail three key drivers (listed below) that may leave India poised to potentially double in GDP to $6 trillion by 2027 to become the world’s third largest economy.
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Each week the Fixed Income team releases its views on macro strategies including duration, country and currency, and sector strategies such as securitized debt, corporate credit, emerging markets debt, government/agency, and municipals.
Emerging markets economies are expected to expand providing an attractive backdrop for both equity and credit investors.
We highlight key topics such as system-wide funded status, asset allocation and actuarial assumptions.
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