 | Horacio Coutino, multi-asset strategist |
“This cycle of oscillation – a hallmark of the bullwhip effect – creates persistent instability. After all, it’s not the average that kills you; it’s the volatility.”
— Angela Huyue Zhang and S. Alex Yang on ‘Is a US-China Trade Agreement Really Possible?’ in Project Syndicate.
Despite a strong earnings season, volatility persisted across US equities and was headline driven in May. The belief in US ‘exceptionalism’ is eroding on lingering trade policy uncertainty, in addition to increasing concerns about US debt sustainability.
This report will analyze:
- S&P 500 earnings expectations for Q1.
- Sectoral earnings growth rates.
- The S&P 500 sectors’ net profit margins.
- Sector-specific monthly performance for US and European equities.
Despite the robust performance of US equities in May, markets also witnessed a rise in yields and a modest decline in the dollar during the month. Therefore, it seems that investors ought to consider the long-term ramifications of these underlying dynamics; the need for portfolio diversification is becoming ever clearer as other markets currently exhibit superior fundamentals and improving outlooks. However, it should still be noted that the narrative of a weaker dollar does not necessarily equate to diminished dollar dominance. A thorough understanding of the US dollar's relationship with other developed and emerging markets across various asset classes plays a fundamental role in effective active portfolio management.
Este artigo é-lhe fornecido apenas para fins informativos e não deve ser considerado como uma oferta ou solicitação de uma proposta para compra ou venda de quaisquer investimentos ou serviços relacionados que possam ser aqui referenciados.
