A hallowed Yuletide tradition in capital markets is the arrival of the Yearly Market Outlooks.
Like the December office party and portfolio rebalancing, they are a permanent fixture of Q4.
If you ever worked in a financial institution, you know Outlooks unavoidably commit one of two sins - recency bias or doomsday fear mongering.
So brace for calls of inflation, higher rates, and lower stocks.
How we feel after reading the third investment outlook in a row
Let’s have a look at some of the most renown pieces:
Goldman Sachs Macro Outlook titles The Long Road to Higher Rates. Bingo. We swear we did not check this beforehand...seriously, it was an easy guess.
Credit Swiss Investment Outlook goes with The Great Transition to ‘more normal monetary policy and more moderate returns'. Bingo again.
Morgan Stanley Global Strategy Outlook calls for lower bonds and stocks. Bingo.
No major surprises here so we will go out on a limb and forecast that BAML, JPM, UBS, etc. will tell pretty much the same story.
In fact, here is the One Outlook To Summarize Them All:
Rates will rise, but slowly. Inflation will moderate, but to higher levels than before. Stock markets will stay flat.
Not very helpful, isn’t it?
We’ll try to do better in the next few weeks. We won’t tell you where to invest, but how to use TOGGLE to invest better.