FYI: As the S&P 500 Index breaks new records even as U.S. Treasury yields fall in anticipation of rate cuts, we believe it is time to be more cautious in overall stock and bond allocations. We see opportunities, however, to take advantage of underlying market dynamics. High-beta, small-cap and pro-cyclical stocks have not fully participated in the market advance, and we see pockets of attractive value and yield in global bond markets. As such, even as we move toward more neutral high-level asset-class views, we are pursuing stronger ideas for sub-asset class positioning, just beneath the surface.
One of the biggest puzzles facing investors in 2019 has been the way equity valuations have surged on a wave of apparent optimism at the same time as safe-haven government bond yields have plumbed new depths of apparent pessimism. One of these markets must be getting the outlook badly wrong, says conventional wisdom. Which is it?
Regards,
Ted
https://www.fa-mag.com/news/q3-outlook--beneath-the-surface-50628.html?print
