Macro conditions remain supportive

Here's what we're thinking

October 25, 2016

Our outlook for global markets remains constructive as key macro variables suggest nearterm risks of recession remain low and policy settings stay supportive. U.S. economic indicators are maintaining a trend that points towards a 2.5% GDP growth pace in the third quarter while inflation risks remain generally modest. According to our leading indicators, heightened risks for the timing of the next recession is approximately two years away which leaves an adequate time horizon to maintain our overweight to equities. Given that we are in the later stages of this market cycle, a bias towards cyclicals remains appropriate across asset classes and sectors.