Multi-asset outlook: equities to grind higher
With central banks having stepped back from monetary tightening and evidence that corporate earnings are stabilising, we believe that the path of least resistance is equities to continue to grind higher. Particularly because the rally so far has been relatively under owned by investors.
From a regional standpoint we favour the US and the emerging markets. The US because growth in the US continues to surprise relative to the rest of the world, and emerging markets because the valuations there are particularly attractive.
The biggest risk to our view is that growth doesn’t come through as expected. We are concerned about the continuing weakness in European activity indicators in particular. But, overall, some positive news for the second quarter with an eye on those growth risks, particularly in Europe.
The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.