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Short-term tactical outlook

Market Outlook Nov 2017

A snapshot of current views on equity, fixed-income and alternative asset classes — updated monthly to help you tactically adjust for opportunities and risks.

Overall positions

Equities

Fixed income

Alternatives

Cash

Key Takeaways

  • Overall, our views have grown more positive. Indicators remain steadfastly bullish. But the margin of error is small for this view — even a small increase in volatility could easily become problematic because of today’s low levels.
  • Equity moved to overweight. Based on both quantitative work and qualitative views, we don’t see any obvious catalysts to derail equity. Scrutiny on companies’ earnings will begin to increase, but that’s partly because earnings are being compared with previous periods when they were strong.
  • Fixed income is under pressure of rising rates. In fixed income, the likelihood that the Fed will raise interest rates has increased, alongside a reduction in monetary policy from the European Central Bank and Bank of England.

Within equities

Within equities

Within fixed income

Within fixed income

Within alternatives

Within alternatives

Currency

Currency

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Jeffrey L. Knight

Global Head of Investment Solutions and Co-Head of Global Asset Allocation

Jeff Knight leads the Global Asset Allocation Team, a dedicated group of investment professionals who manage asset allocation portfolios. The team evaluates economic conditions, market opportunities and risks across the global landscape to determine asset allocation views.

Disclosures

Alternative investments involve substantial risks and are more volatile than traditional investments, making them more suitable for investors with an above-average tolerance for risk. Foreign investments subject the fund to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. There are risks associated with fixed-income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer term securities.

Diversification does not assure a profit or protect against loss.