Global Equity portfolio outlook, positioning, and attribution as of 9/30/2019
September 30, 2019
- We expect global economic growth will remain positive in the near term, but that markets will remain volatile.
- The U.S. economic cycle is maturing – we expect U.S. economic growth to remain positive, though below trend, in the near-to-intermediate term as consumer strength is partly offset by weakness in manufacturing.
- European growth has suffered this year as the German economy has weakened due to softer manufacturing production.
- The Japanese consumer is healthy, but manufacturing activity has suffered with weaker Asian growth.
- We believe moderate growth and an advanced economic cycle warrant exposure to U.S. sectors with a mix of cyclical and secular drivers, like Information Technology and Comm. Services, as well as sectors with limited economic sensitivity like Consumer Staples, Health Care, and Utilities.
- We continue to avoid U.S. sectors with some of the highest economic sensitivity, such as Industrials, Materials, and Energy.
- While we still see better opportunities in Asia than Europe, we continue to underweight international equities as a whole.
- U.S. Consumer Staples
- Western Europe
- U.S. Energy
- U.S. Health Care
- U.S. Communication Services
- U.S. Real Estate