Tactical Asset Allocation: July update

July 2024 update

After several months of stability, economic data around the world is pointing to a softening in growth momentum, particularly in developed markets. This is consistent with an incoming deceleration, but not indicative of imminent recession risks given broadly stable consumption, limited volatility in financial markets, and low and stable credit spreads. Our macro framework has moved back into a contraction regime for the global economy, with a below-trend and decelerating growth environment. It warrants a more defensive portfolio positioning, so we’re favoring fixed income and high-quality US equities.

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See what our macro regime framework is telling us — and what we’re doing in response — in our July 2024 Tactical Asset Allocation update.

Topics include:

• Macro update — US leading economic indicators have registered the largest monthly decline since the summer of 2022. In addition, lagging indicators such as retail sales have also seen large downward revisions and negative surprises relative to consensus expectations. 
  
• Markets — After 12-months of steady improvements, our barometer of global risk appetite is signaling a significant downshift in market sentiment.
• Investment positioning — See what we’re favoring in equity, fixed income, and currency markets.