Global Perspectives

Recent U.S. economic data indicates a continued slowdown in price increases, prompting many investors to consider a September Federal Reserve rate cut a near certainty. The equity market implications may be different than you expect.

Lower-than-expected inflation numbers drove a rotation from large growth toward small value stocks and a sharp drop in short duration bond yields.

The UK and France both held major elections over the past few months. While the outcome in one was anticipated, the other was anyone’s guess. And the resulting market reactions reflected the dichotomous outcomes.

Last week’s spate of U.S. economic data and revisions suggest one thing: the job market is slowing. This has significant potential implications for both the September FOMC meeting and risk asset weightings.

Equities rose across the globe and U.S. treasury yields widened in the short U.S. trading week.  

Political instability in France has sent the CAC 40 index down almost 10% since it peaked in May. The markets currently seem relieved that France’s far-right RN party may not gain an absolute majority in the French Parliament—but that could still mean gridlock and a debt crisis.

As the Fed’s preferred inflation measure came in as expected, U.S. equities mostly rose while corporate bonds fell.

The stock-bond correlation is a critical determinant of risk in traditional portfolios. What does it say right now about the implied risk of a so-called “balanced” portfolio? You might be surprised.

In the last few weeks, we have seen notable divergences in sovereign, investment grade, and high-yield bonds globally, beginning with the French elections. What does it mean when government risk, speculative risk, and corporate risk are all being repriced in different directions?

A quieter holiday shortened week ended with U.S. equities mostly higher while treasury yields rose.