Capital Markets Outlook  |  Q3 2023

Asset allocations: Remain patient as economy slows down

  Current quarter
  Previous quarter
    Change from previous quarter 		Underweight Neutral Overweight
Equity
U.S. large cap
U.S. small cap
U.S. value
U.S. growth
Europe
Japan
Emerging markets
Fixed income
Interest-rate sensitive
U.S. government
Non-U.S. developed country
Emerging markets
Corporate credit
Investment grade / High yield / Floating rate
Securitized
Residential mortgage credit
Commercial mortgage credit
Prepayment risk
Commodities
Cash

Currency views

U.S. dollar versus 		Favor other Neutral Favor dollar
  Euro
  Pound
  Yen

Remain underweight to equity risk

Aside from the Magnificent Seven AI stocks, most of the equity market is showing lackluster forward earnings revisions.

Corporate credit could feel pressure

We continue to expect the economy will slow and perhaps stall near the end of the year.

Neutral on commodities

Commodity markets are painting an unflattering picture of the global economy.

Investor patience may be a virtue as Magnificent Seven stocks rise

July 12, 2023  |  Capital Markets Outlook

Generative AI offers potential in the digital economy, but prudent investors should carefully weigh the value of patience in this stock market rally.

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