- Since last November’s vaccine news, financial markets have been "hanging ten" on a swell of cyclical, value and small-cap stocks, and rising Treasury yields.
- Crosswinds started to grow in the second quarter, however, as economic and inflation data ran hot: rising yields stalled and growth stocks regained their footing.
- The Asset Allocation Committee expects the choppy waters to persist as the Fed edges nearer to a likely “tapering” decision toward the end of the year.
- However, on a 12-month horizon we still think the economic re-opening waves are rideable and that investors will be able to use the potential volatility to add portfolio risk.
For further details see:
Asset Allocation Committee Outlook Q3 2021: From Hanging Ten To Choppy Waves