Markets have suffered in recent weeks as the concept of interest rates and ‘higher for longer’ continues to percolate through the minds of investors. This time last year, in advance of the Jackson Hole Symposium, markets were relaxed and were subsequently given a wakeup call from Fed Chair Powell which led markets lower. As always, all eyes will be trained on the meeting of global central bankers in Wyoming this Thursday and Friday. A raft of developed world PMI data on Wednesday should provide a useful backdrop in advance of the monetary policy meet.
From our own perspective at Zurich, we maintain a positive outlook on risk assets. As always, we are cognisant of the key market risks (including those discussed above). August has been a negative month, but we highlighted the low trading volumes present during the traditional ‘vacation month’ in previous Weekly Investment News issues. Any recent falls should also be viewed in the context of the strong returns so far in 2023 from equity markets. Finally, we may look to make some modest switches within our Fixed Income allocations (both from credit to sovereign and from a duration perspective) in the coming weeks.
As always, if you wish to discuss anything in further detail, please do get in touch.