Key Investment Perspectives: July 2019
The July edition of our Key Investment Perspectives report is headlined by a remarkable first half of the year for US equities, with dovish central banks lifting all boats—for now.
Don’t miss this month’s Perspectives, which provides context around a historic first half of 2019, while outlining the influence of the Institute of Supply Management’s (ISM) Purchasing Managers’ Index (PMI)—a critical survey that economists and investors alike value when evaluating the current state of the global economy.
Hear more about how more accommodative central banks and positive US-China trade talks at the G20 fueled a rally across developed markets. We’ll also explore top market storylines, including: Russia’s unlikely rise among emerging markets (+8.5%), China’s July rebound (+7.8%), the continuing bond yield descent while credit spreads tighten, and a surge in gold prices which are now at a six-year high.
- Global Equities: Even with the remarkable first half for the US equity market (Russell 3000 index +18.7% for 2019), uncertainty continues to be the order of the day. Economic indicators inform a “cautious but not bearish” strategy, even in the face of expected rate cuts.
- Fixed Income: Bond yields continued their fall, underscored by the 10-year US treasury note dropping from 2.14% to 2.00%. While we still have an inverted yield curve, the inversion narrowed. Dovish central banks and de-escalation of US-Mexico border tensions informed a rally in sovereign bonds (highlighted by Romania +6.3% and Italy +5.7%).
- Tactical Allocation: We continue to maintain our modest overweight to equities and an underweight to bonds, particularly high yield bonds. We maintain an overweight to US equities, with underweights to Developed ex-US and Emerging Markets. We recommend low volatility equity strategies to portfolios for downside protection while still capturing an upside.
About Bola Olusanya
Bola Olusanya has more than 20 years experience in investment management as both an executive and thought leader. As Managing Director of Asset Allocation and Portfolio Strategy with Key Private Bank, Bola applies his expertise to direct Key Private Bank’s third-party manager research efforts, oversee the group’s portfolio construction efforts, and design an asset allocation methodology applicable to all stakeholders.
Bola received an MBA with a concentration in finance from Emory University and an MS in computer science from the University of Lagos. He is known for his quantitative expertise, his extensive knowledge of the full spectrum of asset classes, and his ability to mentor and manage high-performing investment teams.