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 Global Market Outlook

  • The quarter began with uncertainty and ended with muted optimism after policymakers contained a banking and debt ceiling crisis. Focus returned to inflation and concerns that economic momentum may stall.
  • Central banks made progress on inflation; however, they remain hawkish as they battle “core” Consumer Price Index (CPI) inflation. U.S. labor markets largely remain strong while there appears to continue to be excess savings in the system. Bond markets were volatile as a result.
  • Credit spreads were supported by stronger than expected economic activity and equity markets. We anticipate corporate earnings to be revised lower and credit to remain subject to economic momentum and underlying rates, making for continued volatility until the hard vs. soft landing debate is resolved.
  • The reopening in China has been disappointing. Other emerging markets, especially in Latin America, have seen growth and lower inflation.

WHAT ARE THE RISKS?

Past performance is no guarantee of future results.  Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.

Equity securities are subject to price fluctuation and possible loss of principal. Fixed-income securities involve interest rate, credit, inflation and reinvestment risks; and possible loss of principal. As interest rates rise, the value of fixed income securities falls. International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Commodities and currencies contain heightened risk that include market, political, regulatory, and natural conditions and may not be suitable for all investors.

U.S. Treasuries are direct debt obligations issued and backed by the “full faith and credit” of the U.S. government. The U.S. government guarantees the principal and interest payments on U.S. Treasuries when the securities are held to maturity. Unlike U.S. Treasuries, debt securities issued by the federal agencies and instrumentalities and related investments may or may not be backed by the full faith and credit of the U.S. government. Even when the U.S. government guarantees principal and interest payments on securities, this guarantee does not apply to losses resulting from declines in the market value of these securities.

IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market.

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