Supportive Market Conditions Maintain Our Constructive Outlook. Near-Term Pullbacks Will Offer Opportunities To Build Cyclical Exposures

Here’s What We’re Thinking

August 24, 2016

We see the medium-term (6-12 month) environment remaining constructive for risk markets. These supportive conditions include global central banks stuck in ‘easy money’ mode (ECB, BoJ, PBoC, BoE) and/or demonstrating patience (U.S. Federal Reserve) alongside a diminished size of the full rate hike cycle. As well, economic growth risks continue fading, the U.S. dollar’s appreciation looks capped, commodities (in particular oil and gold) are stable/recovering, cyclical sector and international market exposure remains cheap and under-owned, investor cash levels remain high and Q2 earnings reports largely beat expectations.

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