Profit Margins for US Companies Are Very Strong; Are They Sustainable?
No. While US companies have some defensible profitability advantages, today’s elevated margin levels may be poised for a reversal of fortune.
July 2019
Given Prolonged US Equity Market Dominance, Should Investors Reconsider Existing Overweights to Global ex US Stocks?
No, we believe investors should maintain a modest tilt away from US equities and toward global ex US stocks.
May 2019
Should Investors Chase the Rally in China A-Shares?
Yes, but only if you can tolerate the volatility. Chinese A-shares have surged in 2019, rising nearly 23% as of March 8. In 2018, A-shares’ -29% return was one of the worst among major markets, but renewed optimism this year over US-China trade negotiations sparked the sharp rebound.
March 2019
Should Investors Fret About Declining Earnings Estimates?
Investors shouldn't sweat the recent downgrades to global earnings forecasts. Although analysts have cut their expectations substantially since September, they still expect most regions to grow in the mid-single digits in 2019.
February 2019
Are US Quality Stocks Still Defensive?
Yes, if you control for tech overweights. Quality has historically been quite defensive relative to the broad market. Today, it is sensible to question quality’s defensive characteristics, as the factor is concentrated in tech stocks and has become quite expensive.
October 2018
In Light of Ongoing “Brexit” Uncertainty, Should Investors Reduce Exposure to UK Equities?
No, investors should consider staying the course. Though developments and headlines associated with the United Kingdom’s Article 50 negotiations with the European Union have been and likely will remain fitful, they reflect more the political nature of the process and less the underlying fundamentals of the economy and its listed equities.
August 2018
Are Emerging Markets Equities Vulnerable to a Rising US Dollar?
Solid fundamentals in most countries should limit the damage. The largest markets are not particularly exposed to the risk of a classic balance-of-payments crisis (like the ones occurring today in a handful of smaller markets, including Turkey and Argentina).
July 2018
Should Investors Boost Their Exposure to US Small Caps, in Light of Recent Economic Policy and Geopolitical Developments?
We don’t believe so. US small caps have benefited from cyclical tailwinds this year, including strengthening US growth and their more domestic orientation (helpful as the dollar strengthens and trade frictions increase), with small-cap earnings estimated to grow twice as fast as large-cap earnings in 2018.
July 2018