| PATH • May 05, 2023 | |
The inflation and recession duality
Andrew Harmstone, Jim Caron
While the risk of a recession in the short term appears to have diminished, the overall effects of central bank tightening have yet to be fully felt. Despite the recent improvement in data, balanced portfolio diversification remains crucial. Read here how we are addressing this.
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| PATH • Apr 05, 2023 | |
Navigating the turbulence
Andrew Harmstone, Jim Caron
We continue to expect short-term turbulence in the wake of banking sector volatility. With U.S. inflation slowing, the Fed’s signal that it is close to ending its hiking should help avoid a sharper recession. See how we are responding.
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| PATH • Mar 03, 2023 | |
Good news, yet markets miss the point
Andrew Harmstone, Jim Caron
Strong jobs and inflation prints have led markets to expect a hawkish Fed in the short term, but a closer look at high-frequency jobs data suggests cooling. This labour rebalancing could change the inflation narrative and lead to a rally.
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| PATH • Feb 02, 2023 | |
Window of Opportunity
Andrew Harmstone, Jim Caron
The market drivers for the first half of 2023 appear to be reversing course from last year—lower inflation, falling rates, US dollar stabilising or even weakening and China reopening. This positive backdrop opens a window of opportunity, allowing us to take advantage by increasing risk exposure. See how we’re responding in our tactical allocation.
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| PATH • Jan 05, 2023 | |
Transitional year for energy markets
Andrew Harmstone, Manfred Hui
We expect a transitional year for energy, with higher oil and gas prices leading to some market rebalancing after disruptions last year. These energy dynamics are key to the inflation story, which in turn is likely to determine asset performance in 2023.
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| PATH • Dec 05, 2022 | |
Relative developed market labour resilience, despite slower growth
Andrew Harmstone, Manfred Hui
The U.S. labour market post-Covid imbalance appears to be starting to normalise. In contrast, Europe’s labour market appears tighter, with wage growth increasing the risk of persistent core inflation. We discuss these dynamics and what they mean for growth and positioning.
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| PATH • Nov 03, 2022 | |
Services Inflation: Higher Hurdle for Further Upside
Andrew Harmstone, Manfred Hui
As supply-chain constraints ease and goods inflation normalises, many expect US inflation to fall--but pressure remains elevated in services due to tight labour market conditions. Read how these continued headwinds are impacting our positioning.
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| PATH • Oct 06, 2022 | |
Energy Crisis: The Power of Positioning
Andrew Harmstone, Manfred Hui
The energy crisis is having differing impacts on net energy importers and exporters. We discuss the implications for currencies, bonds and tactical positioning.
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| PATH • Sep 08, 2022 | |
No Easy Fix
Andrew Harmstone, Manfred Hui
The conundrum faced by central banks continues as they seek to control inflation, at the risk of pushing economies into recession. The Global Balanced Risk Control team discuss the investment implications and tactical allocations to navigate this complex environment.
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| PATH • Aug 09, 2022 | |
Bear Market Rally?
Andrew Harmstone, Manfred Hui
Evidence suggest that the recent strength in developed markets may just be a bear market rally with further downside potentially on the way. Here is how the GBaR team think about investment allocation to reflect the outlook.
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| PATH • Jul 06, 2022 | |
The Central Bank Conundrum – Self-Inflicted?
Andrew Harmstone, Manfred Hui
As inflation remains high, central banks may seek further tightening while growth weakens. The Global Balanced Risk Control team share their thoughts on an optimal asset allocation to weather through the turbulent times.
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| PATH • Jun 06, 2022 | |
Navigating Changing Correlations
Andrew Harmstone, Manfred Hui
Despite a difficult economic climate, we see some opportunities arising, particularly in the fixed income space.
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The Global Balanced Risk Control (GBaR) team is part of Morgan Stanley Investment Management's (MSIM) broader Global Multi-Asset capability. The team uses a top-down global asset allocation approach within a clearly-defined, risk-controlled framework, targeting an agreed level of risk. The GBaR strategy is highly flexible in its asset allocation, enabling portfolio managers to dynamically adjust positioning across equities, fixed income and cash, to maintain a stable risk profile.
The team seeks not only to enhance participation in rising markets, but also provide protection from volatile down markets. They also allocate tactically within asset classes, for example between equity regions and fixed income sub-asset classes with the aim of adding value.
The GBaR team manages a variety of portfolios to a range of risk targets, which may be further customised to meet client requirements including capital growth, income and Environmental, Social and Governance (ESG) criteria.