1. The U.S. consumer remains a bright spot amid slowing economic activity abroad and a cooling U.S. corporate sector.
2. Equity indices have recovered the bulk of their losses from the fourth quarter and valuations appear fair. Given a more challenging macro picture, fixed income has become the more attractive asset class.
3. Some sectors, such as Tech and Industrials, have reaped strong year-to-date returns. Given continued volatility and slowing trends, this has created a case for more defensive sectors.
4. Political risks and slowing economic data has created a tepid view toward developed international markets versus the U.S.; however, markets have already discounted much of this risk.
5. Sentiment toward emerging markets equities turned positive in mid-2018, and investors continue to show confidence in the region due to a more dovish rate environment and expectations for further stimulus from China.
The source for all charts is Bloomberg. To view Sage’s February Fixed Income Outlook, click here.
This article was written by the team at Sage Advisory, a participant in the ETF Strategist Channel.
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