Asset allocation monthly - August 2022

This downturn is global, not US-centric. The current gap between optimistic equity analysts and cautious economists is particularly pronounced. We believe earnings estimates are at risk as the slowdown we anticipate materialises. One reason for recently buoyant equity markets and robust earnings forecasts is the belief that central banks will no longer raise interest rates by as much as had been feared. We do not believe central banks will be dissuaded so easily, however, as inflationary pressures are still strong and persistent.