Should the markets face another bout of volatility, it will likely not be due to Fed tightening, and such a sell-off maybe short-lived if global central banks once again come to the rescue. Treasury Yield dropped to 2. The opinions offered above are as of July 2, and are subject to change as influencing factors change. Tel: 02 Macro Insights.
Forum focus
By selecting «Continue,» you will leave U. Bank and enter a third-party website. Bank is not responsible for the content of, or products and services provided by this third-party website, nor does it guarantee the system availability or accuracy of information contained in the site. Please note that the third-party site may have privacy and information security policies that differ from those of U. End of pop up window. Press escape to close or press tab to navigate to available options. Markets and investing Quarterly Investment Outlook.
Markets Priced Not for Perfection but for Nothing Else Going Wrong
As a fiduciary to investors and a leading provider of financial technology, our clients turn to us for the solutions they need when planning for their most important goals. Featured product. Total Return Fund. Stay in the know, wherever you go. Listen to our podcast. Help grow your money. Learn how to invest.
Forum focus
By selecting «Continue,» you will leave U. Bank and enter a third-party website. Bank is not responsible for the content of, or products and services provided by this third-party website, nor does it guarantee the system availability or accuracy of information contained in the site.
Please note that the third-party site may have privacy and information security policies that differ from those of U. End of pop up window. Press escape to close or press tab to navigate to available options. Markets and investing Quarterly Investment Outlook. Perspectives home. The new year marks a new decade, and promises significant developments. For investors, represented gains across most major commenntary classes following a challengingand many are questioning whether momentum can persist.
We see a global economy forming a solid base in earlythanks to consumers who investmentt employed ckmmentary spending and decent corporate profit trends, yet ongoing growth is susceptible to major policy risks. Trade policy is the most immediate issue, 0220 some q2 2020 investment commentary awaiting clarity before initiating major capital expenses, and rumblings surrounding impeachment add to conjecture.
We expect central bank policy to continually reflect an accommodative and pro-growth stance, adding to our glass half-full perspective on the economy and markets. Of course, markets do not always move in lockstep with the global economy.
Strong asset returns in may have pulled forward anticipated stabilizing and improving economic trends. Within global equities, we favor domestic stocks due to reasonable profit growth expectations and favorable valuations. We are not expecting a blockbuster total return environment for bonds but expect investors will continue to enjoy the defensive properties high-quality government and corporate bonds provide.
However, we are watching for any signs of credit deterioration. In sum, we anticipate a confluence of strong consumers, measured corporate profit growth at reasonable valuations and a global economy grinding out a reasonable output level to produce modest total portfolio gains for diversified investors. The potential for an even better year exists if policy risks remain at bay. Policy adjustments from will likely stabilize global economic growth and lift inflation prospects, at least for the first half of the year.
Government policy will be a key factor in the magnitude and direction of these changes. Policy risks skew slightly toward the United States in as we head invstment the Presidential election.
Political headwinds, outside of trade issues with the U. Restrained inflation, low interest rates and moderate earnings growth provide valuation support and the basis for U. Additionally, the dividend yield of U. Investor sentiment is mostly positive, evidenced by strong performance and attractive valuations, helping shape expectations for still higher invesstment prices.
As we closevaluations are elevated compared to historical norms, yet remain short of extreme levels. Reasonable profit growth, combined with a 3.
Investor sentiment also remains favorable. Valuation measures are reasonable and trending higher, indicative of rising investor optimism. We remain cautious due to structurally low economic potential, a lack of fiscal policy cohesion, a continued uptrend in the U. Achievable double-digit profit growth, combined with a 2. Valuation based on forward-looking earnings estimates is well above long-term averages, suggesting that investors may have already adjusted market prices, a risk for earnings disappointments in the year ahead.
Long-term rates should remain rangebound near all-time lows inbut three factors could drive rates modestly higher: Heavy Treasury issuance due to deficit spending, extremely low government bond yields outside the United States and progress in U.
S Treasuries. Ininterest rate cuts are unlikely to surpass the pace of the third quarter, but central banks globally are likely to maintain an easing bias. This should act as an incremental tailwind to risk assets and inflationary pressures. Domestically, the Fed appears to be on hold for now after three rate cuts in Global central bank balance sheets are growing again, with asset purchase programs resuming.
Ongoing bond purchases should help keep shorter-term bond yields contained and continue to lend support to risk assets. Property market fundamentals are now more mixed. Vacancy rates are near historic lows, but net operating income NOI growth slowed and is currently below the long-term average. NOI is the revenue from property minus operating expenses. Additionally, income as measured by NOI relative to property values is near all-time low levels, indicating prices are high.
While the deceleration in NOI growth is urging caution, we believe investors are still likely to at least earn the dividend yield of real estate investments. We remain cautious, with the understanding that changes in investmenf rates can have an outsized impact on property market performance going forward. Investor sentiment remains favorable across alternative investments, with a large majority of investors planning to commit the same or more capital in the year ahead.
Hedge fund performance was positive and broad based in The best-performing strategies focused on the Technology and Healthcare sectors, which remain attractive opportunities into Private investment fund returns are likely to remain solid when compared to public market but more modest relative to history.
A detailed version of our investment outlook commentary is available. To access a copy, click the button below to download the PDF or contact your financial professional if you have questions. Download PDF. Investment and Insurance products and services commrntary annuities are:. Wealth Management — U. Bank and U. Bancorp Investments is the marketing logo for U.
Bank and its affiliate U. Investkent Investments. The information provided represents the opinion commentray U. Bancorp Investments and is not intended to be a forecast of future events or guarantee of future results.
It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Investors should consult with their investment professional for advice concerning their particular situation.
Bancorp Investments and their representatives do not provide tax or legal advice. Your tax commentaty financial situation is unique. Deposit products are offered by U. Bank National Association. Member FDIC. Credit products offered by U.
Bank National Association and subject to normal credit approval. Bank is not responsible for and does not guarantee the products, services or performance of U. For U. Bancorp Investments: Investment products and services are available through U. Bancorp Investments, Inc. Bancorp and affiliate of U. Insurance products are available through various affiliated non-bank insurance agencies, which are U.
Bancorp subsidiaries. Products may not be available in all states. CA Insurance License 0E Pursuant to the Securities Exchange Act ofU. Bancorp Investments must provide clients with certain financial information. The U. Bancorp Q2 2020 investment commentary Statement of Financial Condition is available for you to review, print and download. Bancorp Investments Invrstment Processing information. Skip to main content. Personal Business Wealth Management. Locations Contact Us Search Search.
Contact Us. Get the app. First-time homebuyer help. Track your application. Your goals, our services. You invest, we do the rest. Low fees and low minimum investment. Learn more about Automated Investor from U. Economic news: Q1
How to invest in 2020?
Listen to our podcast. Featured tool. Getting physical: assessing climate risks. BBB-rated and below investment-grade high yield spreads narrowed close to their 1-year lows Figure All Rights Reserved. Rising inequality and a surge in populism have implications for taxes and regulation. Bonds as ballast. None q2 2020 investment commentary the services offered by 3D Asset Management are insured by the FDIC and the reader is reminded that all investments contain risk. Our Company and Sites. This material is for educational purposes only and does not constitute investment advice or an offer or solicitation to sell or a solicitation of an offer to buy any shares of any fund or security. Portfolio resilience is crucial amid elevated macro uncertainty, with government bonds playing a key role in providing ballast. Despite the risk-on behavior in global equities, fixed income also performed well, largely in response to more dovish policy stances taken by the ECB and the Fed following their respective June meetings. How High to Hike. Sustainability: The future of investing. As we end the first half of this year with U. One such risk: Growth flatlines as inflation rises.
Comments
Post a Comment