Quarterly Investment Letter

The economic outlook is soft, but not disastrous. US economy demonstrates strong resilience, highlighted by robust labour market conditions, and documented by a solid 2.4% annualized real GDP growth rate in Q2. There are no signs for a severe US recession. During the quarter, the Federal Reserve raised the key interest rate range by 25 […]

Despite the negative turn in the economic cycle, the presence of a resilient consumer base and favourable government policies have mitigated the risk of an immediate recession and minimized the potential for a severe economic downturn. The Federal Reserve (Fed) paused on interest rate hikes, maintaining a hawkish stance, as the US experienced encouraging growth

The economic environment presents challenges for investors as market expectations diverge from reality. Despite positive signs in Europe and China, stubborn inflation, deteriorating quarterly dynamics in the US and stagnant eurozone growth add to the complexity. The US economy shows mixed indicators, with a decline in the housing market, but robust labor data and a

The economic cycle has turned negative, driven by increased inflationary forces and geopolitical issues. The US economy could experience a period of stagflation, the eurozone most likely a mild recession, and China will be held back by its inadequately implemented Covid policies and regulatory measures. In the US, macro data continued to point to a

The outlook for the global economy is deteriorating. Inflation is peaking but remains at a structurally higher level, the labor market is likely to stay relatively robust, there are no signs of a ceasefire in the Ukraine-Russia conflict, and the energy crisis is worsening as Russia has halted gas exports to Europe. The US economy

Rising inflation pressures forced central banks around the world to reverse the loose monetary policy. A faster-than-expected tightening of the financial conditions weighs on the global economy. Increasing uncertainty about a possible recession in late 2022 or early 2023 could keep pressure on risky assets. On the labor, house-hold, and corporate side, however, the US

Inflation pressure is mounting and we deal with a mature business cycle with the risk of entering into a period of stagflation. In the short-term, economic downside risks are rising. Central banks weigh price stability over economic growth concerns and have started a new hiking cycle. A vicious wage-price inflation spiral is possible. Geopolitical escalation

Central banks will likely remain cautious about tightening too quickly and global GDP growth is expected to reach 4.4% in 2022. While the new Omicron variant is highly contagious and should delay the recovery process in certain sectors, it is unlikely to derail the global economy. In the US the case for spending remains intact

Global GDP growth is reaching peak levels and inflationary pressures are building. After outstanding returns in equities and bonds, investors will have to adjust their long-term return expectations if the principle of “mean reversion” holds true. The US is the first major developed economy with GDP returning to pre-pandemic levels. Although consumer sentiment has dipped,

Governments and central banks remain commit-ted to generous stimulus measures. This in combination with consumer pent-up demand and a strong wave of capital expenditures form a robust backdrop for the global economy. GDP growth in the US is particularly strong and the service sector recovery is now driving the rebound and labor market recovery. The