In this month's House View
Economic and earnings growth remains intact, and we expect the current bull market to continue. But while we don't expect trade tensions to end the bull market, we do believe that markets may be underestimating the short-term risks around this dispute. In this month's Feature article, we take stock of the evolving nature of global trade disputes and assess their likely impact on financial markets.
To account for rising trade risks, we reduce the size of our global equity overweight, bringing our tactical asset allocation closer to neutral. And as we note in this month's In context article, we are also trimming exposure to trade risks in our sector strategy by closing our underweight to utilities and moving to a moderate underweight on industrials. As we watch for an opportunity to return to a more constructive stance, we'll keep an eye on negotiation progress, and for confirmation that trade uncertainty isn't beginning to chip away at business and consumer confidence.
This month's Top themes section highlights a new preferred securities theme, F2Fs with near-term calls, where we see an opportunity to access higher yields with a lower interest-rate exposure.