Meeting the market halfway
You can argue that the market has misinterpreted the Fed (and we do!) and point to lots of bad things (wages and inflation data that would not support a dovish shift) but simply put, the equity risk premia ain’t a big worry at these levels.
Of course you’ve still got to worry about how these will evolve from here. But the US results season isn’t giving you tremendous cause for concern here either.
Sometimes markets line up in a way where you can have a high degree of conviction, and take a sizeable position/tilt accordingly.
Here, for the most part, the numbers and narrative continue to coalesce around “good reasons to bullish, good reasons to be bearish”.
For us, that means sticking broadly close to our SAA weights, until a more definitive push in either direction.
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