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Investment Perspective · 04.26.23

Approaching Stall Speed

We favor high yield bonds and natural resource stocks as inflation still shows persistence, earnings expectations deteriorate and worries mount over a stalling U.S. economy.
  • Portfolio Construction
  • Market & Investment Trends
  • Multi-Asset Insights
Format
Key Points
What this is
We outline our tactical portfolio positioning as banking system concerns have largely faded, though concerns of recession increased.
Why it matters
The abating of systemic worries drove gains in equity markets to levels approaching the prior highs for the year.
Where it's going
We are overweight high yield bonds and natural resources, while we are underweight U.S. equities (modestly) and emerging markets.
Main Point

Pressure on the economy

Recent banking issues and consequent impacts on bank lending, as well as spillover economic effects from worsening sentiment, add pressure to the growth trajectory. Other lending sources, such as private credit, can partially backfill credit availability. However, we expect overall economic growth to be fairly flat over the next year.

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